For many consumers, credit card debt elimination can seem
like mission impossible. When you're thousands of dollars
in debt and trying desperately to find a light at the end
of the tunnel, the outlook can be quite bleak. Fortunately,
no one is beyond help when it comes to breaking free from
credit card debt. Here are five easy steps that will have
you on the road to credit card debt elimination in no time.
1. Get All of Your Credit Card Statements Together
If you're serious about credit card debt elimination, the
first thing you need to do is gather all of your credit
card statements together and begin creating a "debt
elimination" spreadsheet.
What's going to go on this spreadsheet? You'll want to note
how much you owe on each credit card, the interest rate and
whether that rate is an introductory teaser rate or a
long-term rate. If any of your credit card rates are
currently on an introductory time line, make note of when
that rate will expire and what it will go up to when it
does.
2. Figure Out How Much You Can Afford Each Month
Once you know exactly where your debt stands, it's time to
form your game plan. This is critical if you want to pursue
credit card debt elimination in the quickest and most
efficient manner possible.
First, take a look at how much you can afford to put
towards your debt each month. Add up all of your monthly
expenses (not including the minimum monthly credit card
payments you must make). Take all of your other expenses
(include rent/mortgage, car payments, insurance, gas,
groceries, utilities, phone, etc.) and add them up.
Once you have your monthly expenses added up, deduct them
from your income and see how much you have left over. Take
as much of that amount as you possibly can and put it
towards your credit card debt elimination plan.
For instance, let's say you have $400 a month left after
all of your monthly expenses have been paid. Take $350 of
that (leave $50 for emergencies, etc.) and put that towards
paying off your credit card debt.
3. Addressing Your Minimum Monthly Payments
The next step towards credit card debt elimination is
adding up all of the minimum monthly payments for all of
your credit cards. For instance, if you have three credit
cards, all with a minimum monthly payment of $75, your
total minimum monthly payments would be $225.
If your credit card allocation were $350 each month like
the scenario we outlined above, you'd be in okay shape so
far. However, if your minimum monthly payments were $400
and you could only afford $350, then you have a serious
problem and you need to start cutting out expenses. This
may mean turning off your cable till you've achieved credit
card debt elimination or foregoing your Starbucks runs, but
it will be worth it in the long run.
4. The Plan of Attack
Now that you know exactly how much debt you have and how
much money you can afford to pay off that debt each month,
it's time to form your plan of attack.
First, take the total of your minimum monthly payments and
subtract it from what you have allocated towards credit
card debt elimination. So if you have minimum monthly
payments of $225 and a credit card debt elimination
allocation of $350, your remaining balance would be $125.
Take that $125 and apply it towards the credit card with
the highest interest rate.
Once the credit card with the highest interest rate is paid
off, you're going to take the money you were paying towards
that card each month (in this case, it'd be the $125 plus
the $75 minimum monthly payment) and pay that $200 towards
the card that now has the highest interest rate in addition
to the minimum monthly payment. Keep repeating this process
until you have achieved total credit card debt elimination.
5. The Fruits of Your Labor
Once your credit cards are all paid off, take half of what
you were paying towards your debt and put it into a savings
account. This will help you avoid having to rack up credit
card debt in the future.
What are you going to do with the other half? Take that
half and apply it to the things you were doing without
while pursuing credit card debt elimination. After all,
once credit card debt elimination is achieved, you do
deserve to treat yourself.
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For more tips on credit card debt, saving money and
avoiding getting taken, check out CreditCardTipsEtc.com, a
website that specializes in providing credit card tips,
advice and resources.
http://www.creditcardtipsetc.com/credit_card_debt/
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