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Credit card debt is one of the absolute worst debts you can have. The interest rates are astronomical and are sucking your budget dry each month.<\/p>\nCredit card debt is one of the absolute worst debts you can have. The interest rates are astronomical and are sucking your budget dry each month.<\/p>\n
Plus, there\u2019s also the psychological effects that comes along with having debt. A high debt load can lead to depression, stress, and a huge financial strain.<\/p>\n
If you\u2019re trying to figure out how to get rid of your credit card debt here\u2019s a five step plan that can help.<\/p>\n
Start by pulling out a sheet of paper and recording all of your debt. List the card name, balance, interest rate, and minimum payment amount.<\/p>\n
When you begin the debt pay-off process you need to take an honest and organized approach. Don\u2019t try to skip this step. You need your total debt amount as well as how much you\u2019re paying in interest so that you can formulate a payoff plan.<\/p>\n
Now that you see all of your debts in one place it\u2019s time to try and get some relief on interest. There\u2019s no guarantee that the credit card company will lower your interest rate but if you\u2019ve been a long time customer who has always paid on time you absolutely need to try!<\/p>\n
Go down the list and call each of your credit card service providers and ask them to lower your current interest rate.<\/p>\n
Once you\u2019ve dealt with the interest rates and hopefully had a bit of success it\u2019s time to decide how you want to go about paying off your debt. (This applies if you have more than one credit card to pay off.)<\/p>\n
Debt Snowball Method \u2013<\/strong> The debt snowball method works by paying off your debts from lowest balance to highest balance. (You still make all of your minimum payments.) This method is good for people who need help staying motivated.<\/p>\n I prefer this method because the fewer payments you have the easier everything is to manage.<\/p>\n Debt Avalanche \u2013<\/strong> The debt avalanche method works by paying off your debts from highest interest rate to lowest interest rate. (While still making minimum payments on everything else.) This method is good for highly analytical people who want to save money in interest.<\/p>\n There\u2019s no one right or wrong method. Pick a payoff method that meshes well with your own personality and that will keep you motivated.<\/p>\n Cut up your credit cards. You don\u2019t need them.<\/p>\n If you really want to improve your financial life you\u2019ll save an emergency fund of cash that will cover life\u2019s inconveniences. Your credit cards should never be used unless you can pay them in full. They are not for emergencies.<\/p>\n Now that you\u2019ve mapped out a debt pay off plan my hope would be that you already have a little wiggle room in the budget so you can start paying extra on your debt. If you don\u2019t, you might need to take some drastic measures.<\/p>\n Cut the Big Expenses \u2013<\/strong> Spending time to save $200\/month on rent or transportation is going to go much farther than spend ten hours to save $25 on groceries. Start with the big things and make the changes you need.<\/p>\n# 4 \u2013 Cut Up Your Credit Cards<\/h2>\n
# 5 \u2013 Figure Out Where Your Debt Pay-Off Money Will Come From<\/h2>\n