How to Pay off Credit Card Debt

Credit card debt doesn't become a problem overnight. It builds up slowly and insidiously with only small signs, such as bumping up against a maximum balance or not being able to afford a minimum payment, to warn you that a big problem is at hand. If credit card debt has become a problem for you, the smartest thing to do is stop charging and pay off the balances on your credit cards.

Instructions

Difficulty: Moderate

Pay Your Credit Card Debt

1. Stop charging items to your credit cards the instant you realize that you are in trouble.
2. Pay off cards with small balances that you can afford to clear. Cancel these cards or put them away in a locked box, so that you are not tempted to use them.
3. Talk to the remaining credit card companies, and ask them to lower your annual-percentage rate (APR). Many companies will do this to keep a good customer.
4. Choose the credit card with the highest APR, and focus all your energy on paying this card off. When you have extra money, it should go into payments on this card. When this card is cleared, cancel it or lock it away, and turn your attention to the card with the next highest APR.
5. Make regular payments on the other credit cards. Try to make more than the minimum payments. Making only minimum payments means that you pay two or three times the amount you originally charged in interest fees alone.
6. Consider getting a part-time job, doing some freelance work from home, holding a garage sale or auctioning items online to help pay your credit card bills.

Tips & Warnings

• If you can't afford to pay off a monthly balance, stop charging on all credit cards immediately.
• If you get into trouble with credit card debt, keep the lines of communication open between you and your creditors. Tell them what you can afford to pay and when. The worst thing you can do is to simply stop making payments.
• If you are in deep trouble with debt, get credit counseling immediately.
• Pay off credit card balances every month to keep debt from sneaking up on you and becoming a problem.
• Keep only one or two credit cards. The more cards you have, the greater the likelihood that you'll sink too deeply into credit card debt.