get rid of credit card debt

If you want to get rid of credit card debt then you have to approach it just like you do for dieting.

It is a problem that you know you have.

You have probably tired a lot of different approaches with limited success but, no long term success.

Once you get it down to a level that is more manageable, it just seems to pop right back to an even higher level.

You’ve tried starving yourself of new purchases for weeks and

even months only to go on a spending binge in a moment of weakness.

We have all been there and we understand. No one is judging you.

Just like a diet, let’s break it down into three (3) simple proactive steps you can take to help you finally get rid of credit card debt once and for all.

Step 1: List and arrange

Stack all your credit card statements on the table. Get a pad of paper so you can list and record all your purchases by vendor name of where you made the purchase.

Next to (or under) the vendors name list the total dollar amount spent at the vendor for the month. Also list the month’s name next to each entry.

Once complete you now know who gets most of your money each year.

This is what you will see:

The details you want to record are the outstanding balance, interest rates, minimum payments, and repayment dates.

Arrange them in decreasing order of interest rates. Now you have a list with credit card that charges the most on its balances at the top.

Next, move on to the next step.

Step 2. Set up a budget and establish a payment schedule

Take the last credit card statement you received from each of your credit card companies. Sort them by highest interest rate to lowest interest rate.

Don’t worry about the balance amounts for now.

Next, total up all the minimum payments.

Once complete you will want to multiply the total you just calculated.

This new total is the amount for credit card payments that you will place into your monthly budget.

If you do not have excess each month you will need to find an alternate source to come up with this amount. Perhaps you can find it from the review you conducted of your spending habits.

Now, every month you will pay just the minimum payment on all your credit cards except the card with the highest interest rate. For this credit card you will want to pay the remaining amount of money you budgeted for credit card payment.

Step 3: Credit Card Debt Elimination

One by one you will get rid of credit card debt. First by eliminating the highest interest rate debt and then the second highest rate card and so on.

You will find that with each card pay off you will have more money remaining to be able to accelerate the pay off the next credit card.

Once you successfully get rid of credit card debt you will be on a budget that hopefully has become a habit.

Take the monthly amount of money you spent each month on your credit card payments and divide it in half.

Take one half and put that into a savings account or IRA each month. The remaining half is the amount you can spend each month on your credit card.

Your goal now is to only charge on your card the amount that you can pay off in full each month.