Get Out of Debt Today!
Step 1
Pay more than the minimum balance. There are very few things you can do that will cost you more money over the long-term than just paying the minimum balance every month. It's not pleasant to think about, but paying the minimum balance on a $5000 balance could take you 30 years to pay off. In fact, if you took 30 years to pay off the balance, you would be an ideal customer to the credit card company, for this is how they make their money. Always pay more than the minimum balance each month; preferably, pay considerably more than the minimum. Remember that if you can't afford to pay more than the minimum balance each month, then you can't afford the item that was charged to the card in the first place.
Step 2
Don't acquire new debt. While you're trying to get out of your debt problems, don't exacerbate the situation by acquiring new debts. Save one credit card with the best terms and cut up the rest. Don't keep your one emergency card with you in your wallet or purse; keep it at home where you will not be tempted.
Step 3
Check out credit cards with lower interest rates or balance transfer APR's. Now that you've resolved to pay more than the minimum balance each month, you could benefit from a 0% balance transfer offer in order to stave off interest fees for a while. This will enable you to pay down the principal, which means your debt problems will go away sooner.
Step 4
Use your savings to pay off high-interest debts. It is completely illogical to earn 1-3% interest on your savings account balance while being bled dry by 12-18% APR's on credit cards. Take care of the credit cards first, then build your savings back up.
Step 5
Write down a plan to alleviate your debt problems. Writing it down will make you that much more committed to solving your debt problems. Make a step-by-step plan of action for dealing with your debt problems. Step one might be applying for debt consolidation or debt settlement services, but then the rest is up to you.
Step 6
Add up everything you spend per month on credit card payments and think of how else that money could be used. If you weren't spending what you are each month on keeping creditors at bay, how much wealthier would you be? What would you do with all that extra cash? Use this as motivation in paying off your credit cards, so you can look forward to having more flexibility with your finances.
For the answers to some of the most commonly asked questions about debt problems, visit our "FAQ's" page.
