Nothing is quite as scary as waking up one day and realizing that
you are barely able to make the minimum monthly payments on your
credit cards. If you have found yourself in this sort of a
situation, here are a few tips that will help ease the burden of
credit card debt, and strengthen your budget.
First, stop using your credit cards. In order to bring those
balances down, you will need to stop adding balances every month.
Take the cards out of your wallet or purse, and put them in a safe
place. Better yet, cut them up; you can always get a replacement
card within two to three days if absolutely necessary. Plugging this
leak in your finances is your first step to financial freedom.
Next, get a handle on your credit card debt by prioritizing your
cards by balance and interest rate. The idea is to get a solid hold
on how much you actually owe, and the amount of interest you are
paying. Once you understand where and how those monthly balances are
created, it is easier to devise a strategy to incrementally retire
your outstanding debt.
Last, take your prioritized list and pick the card with the lowest
balance. Devote as much as you can to paying off this one card. When
you have retired that credit card debt, move on to the next card on
the list. Make sure you pay the same amount you were paying on the
other card, plus the minimum payment as well. Continue to pay the
minimum due on all your other cards while you are focused on paying
off one card at a time. As time goes by, you will see the cumulative
credit card debt decrease at a respectable pace. By choosing to stop
creating new debt and systematically focusing on paying off one card
at a time, you eliminate the problems associated with borrowing
money to pay off your credit card debt, only to run the cards back
up before the loan is paid. While you will probably pay a little
more in interest in the short term, your financial outlook will be
brighter in the long term.