Get Rid of Credit Card Debt the Smart Way

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All right, you’re here because you want to get rid of your credit card debt once and for all. The stress of high debt and possibly late payments has finally gotten to you and you want out. Of course, the amount of time it takes for you to get rid of your debt depends on how big your debt is as well as how much income you have coming in, but everyone is capable of paying off their credit cards if they’re willing to do the work.

There’s a right way and there’s a righter way. Doing it the righter way is smarter. So how do you do it?

Steps to Get Rid of Credit Card Debt

• First, you have to be willing to stare your debt in the face. Surprisingly, so many people are afraid to do this. It’s just pieces of paper, people, not snarling Rottweilers! You need to get all of your current credit card statements together and sit down with them. Arrange them from highest interest rate card to lowest.
• Next, add up what your total minimum payments are for all of your cards together. Don’t worry, you won’t be making these minimum payments—you’ll be making more than the minimum if you can afford to. Paying above and beyond the minimum will erase this debt more quickly. Just paying the minimum keeps your debt-escaping momentum practically inert.
• Determine what amount of money you can realistically afford (over the minimum) to pay on your cards each month. This can seem like a scary number, but remember, it’s just digits. This isn’t a time for fudging or being dishonest, either. If you’re unwilling to write down the right number, you’ll only drag out your financial mess even further. For example, let’s say the figure you can pay every month toward credit card freedom is $500.00. You have three cards and the total minimum payments for each come to $300.00. Now tally your minimum payment plus an additional $10.00 on each card; your total payments are now $330.00. Subtract that from $500.00 and you have $170.00 left over. Add that $170.00 to your payment on your highest interest card and pay that amount every month until that card is paid off.
• Don’t quit. However, once that high-interest card is paid off and you’ve closed the account, don’t subtract the amount you were paying from your total $500.00 monthly allotment. Continue to pay out $500.00, but now use the “extra” money from that previous payment toward the next highest interest card. Rinse and repeat until all of your credit cards are paid off.
• And in case it’s not obvious, do not continue to charge things.

In the meantime, it’s in your best interest to call your credit card companies and ask for lower interest rates. I know this sometimes seems like a hassle, but all they can do is say “no.” If you’ve been making your payments on time, however, there’s a good chance they’ll say “yes,” especially if you mention that you’re thinking of switching over to another company’s card. Isn’t spending a few minutes on the phone (okay, half an hour…okay, an hour…call at off-peak times!) worth the amount of savings you can accrue? This is interest you don’t have to pay, which is almost like tossing dollar bills into a fireplace. Wouldn’t you rather make a call and endure just a little elevator music instead of tossing your money away?