How to Get Out of Credit Card Debt

Being in credit card debt can affect your credit score and your stress levels. Here are a few things I have done to reduce my credit card debt and to get rid of credit card debt. I hope they can help you.

Difficulty: Challenging

Instructions

Things You'll Need:

• patience
• money
• planning
• a stress ball

1. Stop using your credit cards! You will never pay off your credit card balance to zero if you keep using it.

2. Call you credit card companies and ask if you are getting the lowest interest rate. Most credit card companies are more than happy to lower your interest rate if you have been on time with your payments, haven't defaulted on your account and have a good overall history with your credit card.

3. Don't go to an outside company to consolidate your debt. I have been told that by going to an outside company to help you consolidate your debt you can hurt your credit score.
   Instead contact the bank you do most of your checking and saving with if they can offer you a personal loan in the amount of your credit card debt. Find out what the monthly payment on that loan will be. Often times it is much less than what you are paying your credit cards in minimum payments and the interest is lower too.
   Use the personal loan to pay off your credit cards. Then pay off the personal loan.
   Sounds silly to take out a loan to pay credit card debt but if you consolidate your debt this way you will save money on interest and hopefully pay off your debt faster.
   For example, I was making payments on 4 credit cards for almost $350 a month in minimum payments. I was able to get a personal loan through my bank and pay all of the cards off. Then I only owed the bank for a monthly minimum payment of $150. I still paid the loan $350 every month like I had been doing with the cards but instead of just paying the interest I was now paying down the principal faster.

4. Instead of trying to pay every card at once try and pay for the one with the lowest balance first or the one with the highest interest rate.

5. If you get a credit card offer for a new card with 0% interest for a certain amount of time on balance transfers, think about transferring some debt from another card. Only do this if you think you can pay back the amount you are transferring in full with the amount of time that you will have 0% interest.

6. Pay your bills on time to avoid late fees.

7. Always pay more than the minimum due on your credit cards.

8. During the day keep track of what you spend money on but don't spend any. For example, if you were going to buy a newspaper and a coffee that's $1.00. You were going to buy a new pair of sneakers, $40 and you might have bought a fruit smoothie $4. That comes to $45 dollars you might have spent that day. Instead take that $45 and pay it towards the balance on your credit cards.
   I have a folder at home where I put my "would have spent" money and at the end of a few months I put that money towards paying down my credit card debt.

9. Lastly, don't get stressed out. You will get out of debt. It isn't easy but it can be done. Try writing online for extra money or selling things on ebay to get extra money and use it towards getting out from those bills. Until you are out of debt you are never really "making" money.

[unclet53]

on 4/21/2009 Great article!

[jcrush]

on 3/8/2009 I heard the same thing about consolidation companies, thanks for a good article/*****