There's nothing inherently wrong with using credit cards, but the convenient spending they allow can lead to unmanageable debt if you're not careful. If you're facing credit card debt that cuts into your family's budget and results in bills that are higher than you can afford, you need to pay off your debt in the right order by using some common sense tactics.
Stop Using Credit
You'll have a much better chance of paying off your credit card debt in a reasonable amount of time if the balance isn't constantly creeping upward. When you decide it's time to get serious about paying down your debt, stop using your credit cards altogether. You can cancel the cards, or, if you plan to use them in the future once the balances are wiped out, store them someplace safe where you won't have easy access to them.
Reduce Spending
The best way to pay off credit card debt is by making the largest payment you can afford each month. This means cutting back elsewhere so you can write the biggest check possible to your credit card company. Eliminate luxuries such as cable television, cell phones and vacations. Find free alternatives such as a local park where you can exercise instead of paying for a gym membership, or a nearby nature preserve where your family can enjoy the outdoors without taking a plane trip to an exotic location.
Contact Your Creditors
If you run into financial difficulty while paying off your credit card debt, don't hesitate to contact the credit card companies. Creditors may offer to forgive a late payment fee if they think it means the difference between your continuing to make payments or giving up and defaulting on your debt. If you need additional help, a nonprofit credit counseling agency may be able to work with you and your creditors to reduce your interest rate. However, credit counseling services cost money, and there's no guarantee that they'll be able to save you money.
Pay High-Interest Cards First
If you have multiple credit cards, pay off the card with the highest interest rate first. Interest rates contribute significantly to what you owe, so eliminating high-interest debt will save you money in the end. Even if its balance is higher, pay off the highest interest card fully while making minimum payments on all your other cards. When the first card is paid off, move to the card with the next highest interest rate and so on.
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