How to Pay Off Credit Card Debt

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By SimplyFrugal
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Pay Off Credit Card Debt

Credit card debt can be overwhelming and can easily spiral out of control. This article shares some ideas to help manage the debt and pay it off in a realistic manner.

Difficulty: Moderate

Instructions

Step 1

Organization is key. Create a spreadsheet in Microsoft Excel, or even just on paper, which lists the credit cards that you have. Create a column for the balance, the credit limit, the APR, any special APR and its' end date, and the amount due and due date each month.
Step 2

Once you have organized the information, you need to prioritize the credit cards according to the order in which you need to pay them off. You always want to pay off the credit card with the highest rate first. However, if you have any credit cards with special limited APRs and will have to pay any accrued interest at the end of the time period, you should budget a monthly amount to assure that the credit card is paid in full by the end date.
Step 3

Determine the amount of money that you can pay above the minimum payment on the card you have set as the priority. Read my article 'How to Decrease Monthly Household Expenses' for ideas on where you can save money and put towards paying off your credit card. Continue to pay the minimum on your other credit cards. As you pay off each credit card, you will set priority to the next credit card with the highest APR.
Step 4

If you have credit cards with high APRs (greater than 9.9%), you may want to consider a balance transfer. Read my article 'How to Make a Credit Card Balance Transfer' for details.
Step 5

To pay off your credit card debt more quickly, you should avoid adding any purchases to the credit card. If you must use a credit card, limit your purchases to one credit card, preferably with a low rate.
Step 6

Do not avoid the credit card company. If you can not make a payment one month, contact the credit card company and ask for their assistance. It is always viewed favorably when you take the time to recognize that there is a problem and try to work with the credit card company on a solution. You may ask if they can lower your payment amount or defer payments for a month.
Step 7

Use the spreadsheet to stay organized. Keep track of the due dates and credit limits to avoid accruing any late fees and additional fees. Each month after paying your bills, update the balances on the spreadsheet. Not only will this keep you organized, it will give you a sense of accomplishment as you pay off your debt!