How to Ditch Credit Cards

A typical household has good debt and bad debt. In the bad debt category, you'll likely find high interest credit cards. But you can ditch credit cards and reduce your debt. That's one of the first steps necessary to enjoy a debt free lifestyle.

Instructions

1. Choose one credit card to keep for emergencies. The key is that this card can only be used for emergencies. Some people store a single credit card in a bag of ice that stays in the freezer. Then, if you need to use it, you have to first defrost the block of ice. That stops impulse shopping and gives you time to think about what you're really using the credit card for. If your budget allows you to stash cash for emergencies, then you don't even need to keep this card around.

2. Destroy the rest of your credit cards. Use scissors or your shredder to cut your credit cards into small pieces. You can even use your fireplace to burn them. (Of course, please practice fire safety.) The point is that you take out all of your aggressions on your plastic so you won't use it anymore. If you can't use it, you won't run up any more debt.

3. Make a monthly budget and stick to it. Make sure you spend less than you bring home, and you shouldn't need credit cards anymore.

4. Pay off your credit card balances. Rank them by interest rate and pay the ones with the highest interest first. When one balance is paid off, take the money you were applying to that card and pay off the card with the next highest interest rate. It may take some time, but it's worth it to get all your credit card debt paid off.

5. Leave credit card offers untouched. You'll still get them in the mail, but it's pointless to even open the envelope. Destroy the temptation and move on.