How to Eliminate Credit Card Debts Fast

Most adults in the United States today are in debt to credit card companies, and usually don't know how to improve their situation.

Difficulty: Challenging

Instructions

Things You'll Need:

• Credit card Debt
• Income

1. The first thing to do is to make a list of all the individual debts that you are currently paying off. List both the totals, and what you are paying each month to each company. Lastly to the side of this make a note of the rates of interest you are being charged. The rates of interest should be available either by calling the companies, or by reviewing the terms and conditions of your card agreements.

2. 

   Having set out all of your debts, it should become readily apparent which are going to take the longest to pay off at current rates, and which have the highest rate of interest attached to them. If there are any that only have a small amount to pay off on them, or that have particularly high interest rates, then these should be targeted first.
   
   Change all but the one selected to pay off first at minimum payments, and then put all the rest of the money you were paying out into paying that one debt off. After the first debt is paid, select another, and repeat until you have all of the debs paid.

3. If you have more debt than you can even afford the minimum payments for, then getting a loan to pay off some of the debts immediately is often a good idea. These loans can sometimes be scams, and end up being higher interest than you were paying, so shop around before you sign anything.
   
   If you do find a debt reduction loan that seems suitable, then be sure that you can pay off the loan at higher than the structured monthly payment should you want to. Some companies will try ti charge you penalty fees if you pay the loan off early or at a higher monthly rate than you first agreed.

4. 

   At this stage you should either destroy or remove all of your credit cards so that you cannot use them on the spur of the moment. If you don't have the cards, then using them wont be as big of a temptation should you spot something you like.

5. 

   If you spend anything on any particular vice or habit, whether that might be smoking, drinking gambling or drugs, then they need to stop if you are in debt. Things such as being able to go out to the bar should be thought of as a luxury rather than a necessity. Consider what is at stake should you lose your home or be declared bankrupt, quitting these things shouldn't be that difficult, even if only temporarily.

6. 

   If you are struggling to make payments every month and are receiving threatening phone calls and letters, then everything else you are spending money on should be considered an extra. To that end things like cable packages of hundreds of channels, magazine subscriptions and any large purchases should be put on hold until you can really afford them.

7. After you have eventually paid off all of your credit card debts, the best thing to do is to cancel all of your credit cards and to only use a debit card instead. Be sure to remove the overdraft also if you cant trust yourself not to get back into debt.

[betterbody]

on 5/5/2009 Some good ideas for getting out of credit card debt.