How to Eliminate Credit Card Debt

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  • 2/22/12
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    Eliminating Credit Card Debt
    If you are one of the millions of American credit card holders who carry a revolving balance, you probably want to pay off your debt once and for all. Credit card interest is more expensive than many other types of debt. You probably pay twice the interest rate for your credit cards that you do for your mortgage. Some borrowers pay tens of thousands of dollars in interest over decades. You do not want to be in that position, so take a realistic look at your financial situation, and resolve to pay off your credit card debt.

    Financial experts recommend the following steps to free yourself of the psychological and financial burden of revolving credit card balances.

    1. Rein in your spending. When you owe thousands of dollars on your cards and you continue to charge purchases, you are only worsening the situation. Resolve to pay for what you buy today instead of waiting until tomorrow.

    2. Track your spending for a month, and establish a budget. When you see where your money is going, you can eliminate wasteful spending. Allot yourself a fixed amount of fun money each month, and stop using plastic to buy whatever you want.

    3. Pay for items with cash rather than credit cards. When you use cash, you are more likely to think twice about those impulse purchases. Most of us attach more value to cash that we see in our hand than we do to a credit card bill we will not receive for a month.

    4. Call your credit card company, and ask if they will lower the interest rate on your card. Tell them you are thinking of moving to another card with a lower rate. Your creditor may well lower your rate, enabling you to pay off your balance more quickly.

    5. Consolidate your credit card balances to a card with a zero- or low-interest introductory period, and do your best to pay the balance off within the introductory period.

    6. Take the money you have saved by budgeting, and apply it to your debt. Stay focused. It will take time to eliminate your credit card debt, but the psychological freedom and financial benefits that come with being debt-free will make the process well worthwhile.

    Image Credit: v i p e z
    Written By: Shannon R 
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