How To Become Free of Credit Card Debt

Many people find themselves carrying balances on multiple credit cards. With a tough economy, it's vital to reduce the amount of debt you have. To accomplish this, you first need to understand how much debt you have.

First, examine your monthly expenses by writing them down. Be sure to include everything from coffee purchases to cell phone and cable television bills. Now take a good look at these expenses. Some of these can be eliminated, others reduced. You can use this freed up money to pay down your credit card debt. The more money you can fee up from your monthly expenses, the better position you will be in to tackle your debt.

Also take a look a close look at your grocery expenses. By using coupons and buying store brands, you can usually free up a good amount of extra cash to apply to your debt.

Next write down every credit card you have. Next to the name, write down the total available credit and then the balance on the card. Also write down the interest rate and payment due date. By writing this down you can get a clear understanding of each credit card and where you stand.

Order the list of credit cards from lowest balance to highest. You want to start by paying off the lowest balance first. Once that's paid off, focus on the next lowest balance. Continue with this process until you have cleared all balances.

It's important that you don't ever miss a payment date. Late fees can range up to $50 and being late on one card can impact the interest rates on all your credit cards.

Next, negotiate a better interest rate for your high interest rate credit cards. Use the contact number on the back of your credit card to call. When you speak with the credit card company, tell them that you are having financial difficulties and are looking to lower the interest rate (rather then default). With a little perseverance you can get your rate lowered.

Once you have one card rate lowered, try calling the other cards that you have and advise that your one card has provided you a better rate and ask the company to match it (or do better). This works best when you are not late paying your credit card bills as the company won't want to loose you as an income source (after all they are making good money on the interest they charge you).

Keep in mind that the debt won't disappear quickly but by using the above methods, you will be well on your way to independence from credit card debt. For me it took just over 3 years to clear all my debt. So be patient and keep your eye on the goal.