How to Pay Off Credit Card Debt

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By younite17
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Credit Card Debt can be a nightmare when it spirals out of control and leads to worry and obnoxious collection calls. Here are a few suggestions on how you can get out off credit card debt, and stay out for life!

Difficulty: Moderate

Instructions

Step 1

Sit down and create a Family or personal budget. Start with your income, and then write out all of your expenses. Make sure to include your mortgage or rent, utilities, loans, credit card debt, spending, savings, and unbudgeted expenses. Any expenses you can think of should be written down. A great way to do this is to look over a few months of previous expenses.
Step 2

Make sure that your budget has every dollar allocated, even if it's into Unbudgeted. If you have more expenses than income you will need to do one of two things. Earn more money, or spend less. Unless you have time to get another job, I suggest the later.
Step 3

If you have more than $10,000 in credit card debt and don't make a six figure salary you might want to consult a debt consolidation specialist. If it is between 1,000-10,000 then unfortunately you are probably on your own, although some help may be available if you are on the higher end.
Step 4

If you continue to rack up debt the solution is simple but painful. Cut your credit cards. Don't freeze them, or put them in a safe -- just cut them.
Step 5

Most people claim to have a credit card in case there is an emergency. Unfortunately once we have them it is easy to use them every time a Christmas or birthday sneaks up. The first step in paying off your credit card is to keep paying the minimum balance. Cut as many expenses as you can and save $1,000 as an "Emergency Fund."
Step 6

Once you have achieved your "Emergency Fund," start aggressively paying off one of your cards with the lowest balance on it first, continuing to pay the minimum balance on all other credit cards. This will allow you the satisfaction of quickly paying off a card quickly.
Step 7

Once you have payed off the first card, use the money you were paying towards that one into paying off the next card. This is referred to as the "debt snowball," because now you are paying the original amount of the old card plus the minimum balance of the next credit card.
Step 8

Repeat the "debt snowball" payment process on your remaining Credit Cards, until all of them are payed off. Good luck.