Wednesday, September 29, 2010

How to: Get Rid of Credit Card Debt For Good

The Virgin Credit Card, issued by Virgin Money...Image via Wikipedia
When you finally realize your in deep credit card debt is the time you know you need to do something, but what? What has caused you to wake up. Was it the worry and sleepless nights thinking your going to lose it all. 
Most American family's are in credit card debt to the tune of between $2000 and $8000. Short of winning the lottery or declaring bankruptcy, there are no short cuts to paying off your debt. But there are some ways to systematically and effectively get rid of your credit card debt. 
Getting out of debt on your own is possible, but it will take a little work. Step one is to stop charging more debt. This may be the hardest part of the process if your short of money and unorganized. It's time to take control. 
Next you must access where you financially. How much do you owe and to whom do you owe it to. Might as well throw in there all your debts like Doctor bills and personal loans. Make a list with name of debtor, balance, interest rate and minimum payment. 
To do this right you must also create a budget of all your income and expenses. It's time to cut back for a while in life style. I'm talking about maybe it's time to find some things to cut out of your life, but only during the time of this war on debt. Things like cable TV, eating out and other things determined by you. Remember the more money you free up, the more there will be, that can go to pay off debt. The equation is that the more income that goes to debt, the sooner you will be done. You could look into taking on more hours at work or getting a part time job so you will have more money to throw at your debts. 

                             Here's Help On  "How to Set Up A Budget"
Now that your organized and have the cash ready , let's attack the first debt. Remember that list you made with debts listed on it, let's get it out and determine who we will attack first. Let's find the debt with smallest balance. We are going to pay that debts minimum and as much money we can scrape together and send it to that account. You have reduced spending on other things and we are going to use that money to put on this debt. While we're doing this we keep making the minimum payment on all our other cards, no extra to those cards. We are focusing on the smallest debt only. When we are done with the smallest debt, we then go to the next smallest and attack that one with all the money we can throw at it. 
There are two strategy we are using here. First the focusing on the smallest balance first with everything we have. Why do we focus on the smallest balance? What if I have a balance that has a higher interest rate? You ignore it and stay with the smallest balance because you need to have some wins in this process. With some wins you feel like continuing, because you will eventually lose interest in the long process. Some wins keeps you motivated. It's like going on a diet. If you don't lose some weight you'll give up and quit. 
The second strategy is after completing the first balance you take all the payment from the first card and throw it on the second card. Then continue this till you pay off all your cards. You must have an intensity when doing this. It's a hard task that takes hard work. You will lose faith during this process so between the budget and focus, you will get it done. 
For all this to be worth it you must not use credit cards again. It's to easy to go back into debt and after all your hard work it would be a tragedy. You will continue to budget and live on less than you make. Saving for future bills and creating an emergency account for the rainy day that is sure to come. 


  1. Hello,

    This is Maria. I have seen your blog: and I must say that I'm really impressed. Would you permit me to make a guest post in your blog? The article will be totally unique and written on debt consolidation.

    Please get back to me at my email id.

    Waiting to hear a positive response from your end.

    Maria Smith

  2. Good advice. I've been debt free for quite a while and it is a great feeling. I hope many more join me.


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