Strategies for Getting Out of Credit Card Debt

Many people are struggling with credit card debt, and while there are no easy solutions here are some tips for paying off a credit card that can be used to help ease the debt burden.

Don't Get Scammed

There are plenty of companies advertising services to reduce and eliminate credit card debt. However, some are scams and some are too expensive. For help with debt, a consumer should look for a credit counseling service that is affiliated with the National Foundation for Credit Counseling (www.nfcc.org).

Stop Using the Cards

For many people this may be the hardest step, but to pay off your credit card debt you first need to stop using the card. If the card is being used to cover a budget shortfall each month, then either the person's income must go up or their expenditures must go down. Once the card no longer has to be used, stop carrying the card to reduce temptation.

Gather Information

Before the debt can be paid off a consumer needs to determine how much is owed. This is simply a matter of gathering up the most recent statements and adding it all up.

Develop a Plan

There are two commonly used ways to attack debt: paying off the highest interest rate cards first or paying off the lowest balance first. By paying off the highest interest rate card first the consumer will save money as the lower interest rate cards will not accrue interest charges as quickly. However, paying off the smallest balance first can give a person a sense of accomplishment more quickly. Choose whichever will work best for you and get to work!

Force Savings

Consumers need to have money in savings for a number of reasons. First, emergencies come up and if there is not cash that can readily be used, then it is likely that the credit cards will again be loaded up. Also as cash savings are built up the excess can be used to make large lump sum payments toward the credit card debt.

Chart Success

One great way to provide motivation is to develop a visual chart of the work that needs done and how much has been accomplished. The constant reminder can help a person to not use the credit cards, avoid spending money needlessly, and provide motivation to get the debt paid off.