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How to get out of credit card debt

Many people find themselves with significant amounts of credit card debt at some point in their lives. In order to get out of debt, you need to get motivated and concentrate on doing what you need to do to get yourself out of the situation. The following are a series of tips that will help you out:

Stop Charging

This is perhaps the most obvious but, at the same time, the most difficult to do. Take out some scissors and cut up your credit cards, particular ones with high interest rates. If you are not able to do this, take your cards out of your wallet so you won’t be tempted to charge more.

Transfer Your Balances to a Card with Lower Interest

The lower the interest rate, the more each of your payments will positively affect your debt. Take advantage of balance transfer offers that are available.

Pay off your Debts from the Smallest to the Largest

Make all of your minimum payments except on the debt which is the smallest. Pay off as much as you can on this one. The advantage of doing this is that you will certainly be more encouraged by paying off one or two debts and this will be far easier with those that are the smallest.

Consider Programs that Offer Debt Relief

Because of the recession, there are several ways that you can go about reducing your credit card payment. Do some research and you are sure to find a way through which you can reduce your credit card debt.

Pay Half the Minimum Payment Twice Each Month

The calculated interest is dependent on the average balance on the account for the whole month. Making payments every two weeks will reduce the total balance and thereby reduce the finance charges. Additionally, splitting up the payment will make the paying of the bills less daunting.

Make Small Payments When you Have Extra Money

Any extra money that you receive from family, eBay sales, overtime earnings, part time work, or garage sales should go straight to your card to pay off the debt. Although it might not seem significant, it will soon add up. Additionally, if the money is deposited in your checking account, you will be more likely to spend it on unnecessary items.

Close New Accounts

As you pay off your balances, close out your new accounts and leave your one or two oldest cards open. One of the aspects of your FICO credit score is the length of your credit history, which becomes negatively affected when you open new accounts. Through the closing of these new cards, you are essentially making your credit history appear older. If you are unsure as to how old your current accounts are, you should consider ordering a credit report.

If you are not someone who is able to control your credit card spending, you should perhaps consider cutting up all cards and living solely on cash. However, before you do this, make sure that you have a stash of emergency funds.

This guest article was contributed by Jane Sanders from Debt Management. To get more information, read her articles about credit card debt management.

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One Response to How to get out of credit card debt

  1. I used these exact steps to pay off my credit card debt. It’s been 9 months since I became completely debt free. It’s a huge weight off my shoulders.

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