Mom Influencer Pays Off P1.3M Credit Card Debt—Here's How She Did It

Louise Santos, better known as ‘Mommy Practicality’ shared her journey to a ‘debt-free life,’ by paying off a staggering P1.3 million in credit card debt.

In a 2-part video series, Louise courageously shared her story, revealing that she had accumulated the debt over a span of 15 years, spanning six delinquent credit card accounts. She emphasized the gravity of confronting one’s debt reality, stating, “Kasama na dun yung pinaswipe ko pati na rin yung naaccumulate na interests niya.”

Louise admitted to Smart Parenting that she shared her debt story to inspire others. “Before sharing my story, any story for that matter, I pray first if it could help others who are still going through what I've been through and if it will glorify God. Because I was triumphant in this debt-free journey, I decided to share the good news publicly and give hope to those in long-term debts, that they too can get out of it and have peace of mind knowing they are no longer slaves of debts. My intention was to motivate my viewers to work on their own debt-free journey,” she said.

Regarding her decision to clear her debts, she shared, “The decision to be debt-free is mainly because of my faith conviction knowing God wants me to pay who or what I owe. He blessed me and my family with so much and part of being a good steward is to return what I borrowed. Next is for peace of mind that even if the collectors stopped calling, the demand letters stopped coming, in my heart I still have an obligation to settle my accounts because I really used them. These credit cards actually were used for good and were my saviors or kapit sa patalim solutions to mountains of challenges during those low times in my life. I want to live an honest life knowing that I really am debt-free to its truest sense. Lastly, I want to clear my name and rebuild my credit standing for future needs such as the housing loan we were granted for after paying off all my debts and for my personal business needs too.”

Here are Louise’s practical tips for paying off credit card debts.

Mommy Practicality’s Road To Debt-Free Life Tips

1. Stop using your credit card.

Louise advises, “Please stop using your credit cards para hindi maka-incur ng more utang or more debts na mag-iincur in syempre ng malaking interests.”

2. Gumawa ka ng pera.

Understanding the necessity of generating extra income, she shares, “Heto yung mga sinasabi na may raket, may sideline, at ipunin mo yung pera mong yun para pambayad mo sa mga utang mo. Unahin mo muna bayaran yung utang mo bago ka gumastos ng pangluho mo. Let’s pay our debts first.”

She also shared her diverse income-generating activities, revealing, “During my time, nag-banda ako, yes, singer ang ate niyo. Nag-online selling ako. TV commercial talent ako. Nagbebenta ako ng crinkles tuwing Pasko sa opisina.”

“Ang dami nating pwedeng gawin, online selling, dropshipping, insurance agent, real estate agent. Name it,” she further suggested. “And make sure na ipunin mo yung kinikita mong extra apart from your day job para pambayad ng credit card utang.”

3. Ilista mo ang lahat ng iyong utang.

Louise stresses the importance of knowing exactly where you stand financially: “Ilista mo lahat ng utang mo, lahat ng bangko at credit cards na pinagkakautangan mo para maisama natin ito sa ating savings goals or ang ating financial goals.”

4. Do the Snowball method.

Explaining this method, she advises, “Kung meron kang multiple credit cards, unahin mo yung merong pinakamaliit na utang. Kung kakayanin mo na bayaran siya ng buo, then that’s already 1 credit card debt out of your list. And then you move to the next, and then go to the next one. In that way, may small achievement ka na sa pagbayad ng kahit na pinakamaliit na credit card utang mo among all of your credit cards.”

5. Consider balance transfer cards.

Louise also shared several options to make the payments easier, one of which is via balance transfers.

“Merong mga credit cards na nag-ooffer ng balance transfer, meaning kung ano yung utang mo sa isang credit card pwede mo siyang ilipat doon sa credit card na yun,” she explained.

“Personally, ginawa ko yun and for some time, I was successful at paying my credit card debts,” Louise further shared. “But because of the situation na meron ako during that time…hindi ko kinaya ituloy yung pagbabayad, kaya nga nauwi tayo sa delinquent account.”

6. Don’t just pay the minimum amount due.

Emphasizing responsible credit card use, she advises, “Never just pay the minimum amount due. If you can, please pay a little above the minimum amount due or kung kaya mong mas lakihan pa ng bongga yung ibabayad mo doon sa credit card mo, the better.”

She also reminds about the debt nature of credit cards, saying, “Credit cards are not cash, they are debts that accumulate and incur interest na pwede talagang mabaon tayo sa utang so let’s have that mindset and when paying that debt, let’s pay kung ano yung naikaskas natin as much as we can.”

7. Make payment arrangements.

Another payment option Louise recommended was to make payment arrangements with the banks or collection agencies to set payment schedules and amounts.

She said, “Before, nag-enter ako sa isa o dalawa na payment arrangements. Nakatulong ito sa akin dahil talagang may schedule na at sinabi ko sa kanilang ito yung kaya kong bayaran on a monthly basis until I finished, two years yung kontratang yon. And it really helped na alam mo na after finishing paying kung ano yung pinag-agreehan niyo sa kontrata niyo ay wala nang interest ito.”

“Do that for one credit card at a time, at maki-usap lang ng maayos sa mga banks, sa law firms, at sa collection agencies, and I’m sure, na with your sincere and totoong istorya plus with lots of prayer talaga, prayer really helped me, mapagbibigyan yung inyong request,” Louise advised.

8. Take the amnesty program offers.

Amnesty program offers are another option Louise recommended. “Kunin niyo yung amnesty program offer sa inyo. And in all my six credit card utangs, I took advantage of the amnesty offers na binigay sa akin ng collection agencies and also the banks na naniningil sa akin. Napakalaking discount ang naibigay sa akin,” she shared.

However, she said banks offer this option to selected credit card holders, “So hindi po hinihingi ang amnesty program, it’s being offered to selected credit card holders.”

9. One time payment is the best option.

Finally, the best payment option Louise recommended is a one time payment, “Mas mapapakiusapan mo pa yung bank or collection agency na bigyan ka pa ng mas malaking discount sa iyong utang.”

She recounted her experience with this option, saying, “Meron ako isang credit card utang na P300,000, kasama na yung interests doon sa mga nagdaang mga taon na hindi ko talaga siya pinansin. Nakiusap talaga ako, ‘Ano po yung pinakamababa ninyong amount na pwede niyong ibigay sa akin para bayaran ko at babayaran ko po siya ng cash.’”

10. Ask for certificate of full payment.

Finally, she emphasizes the importance of obtaining certificates of full payment for future financial endeavors. She said, “Once na nabayaran mo na ang lahat, make sure that you ask for a certificate of full payment. In the future, kapag naka-luwag-luwag ka na sa buhay, you would need a personal loan for your business, the housing loan, kailangan mo itong mga certification of full payment na ipakita as one of the requirements. This is to prove na wala ka nang pending na mga utang at nabayaran mo siya para ma-grant ka ng another loan.”

Louise’s money lessons

Louise has definitely learned her lesson when it comes to debts. And she shared with Smart Parenting the money lessons she’s impairing to her children:

• Learn how to save money as early as they can.
• Be practical when deciding how to spend it.
• Their skills and talents are God's gifts and His way to provide for them. They should put them to good use, to help and inspire others, and to also earn from in the future.
• They don't always need to keep up with the trend or with what they see on TV or social media, they should be able to discern well if it's essential.
• Live within their means and avoid borrowing money from people or be in debt for expenses which aren't important.
• Always be prepared for the future.

And for other parents, she offered the following lessons:

• Live within your means.
• If possible, have multiple income streams to be able to pay debts, to save, and prepare for the future.
• Credit cards are not the enemy, it's the misuse, mismanagement, and wrong mindset we have that are at fault.
• Use your credit cards wisely.
• Make paying debts a priority. Be debt-free before you start investing.
• Avoid having delinquent accounts on any of your payables (credit cards, bank loans, postpaid lines, etc) so you'll maintain a good credit standing and not get included in the black list of financial institutions. You'll get a better chance of approval for your car, housing, personal, or business loans you'll need in the future.
• If you're in a mountain of debt talk to your bank or to a financial advisor/ experts and ask for your options on how to be able to get out of debt.
• Once you're out of debt, build your credit standing and don't repeat the same mistakes.
• Lastly, always remember that God provides for what we need. He will bless us with means to pay our debts especially if our hearts are in the right place.

How can you teach your children to be money smart? Read this article to find out.