How to Eliminate CC Debt

Eliminating your credit card debt can seem impossible but it isn't. If you know your debt has reached high proportions and you've taken an interest in getting rid of it, you have taken the first step in the right direction. Hundreds of billions of dollars are spent each year on credit cards, creating financial woes for consumers and large profits for credit card companies who have a variety of ways to keep you charging. With self-discipline, know-how and patience, you can put yourself in the black and refuse to be taken in by credit card companies.

Instructions

1

Stop using your credit cards. This is the first step to eliminating your debt. It isn't easy to quit using them when you are used to the instant gratification they can provide. Making the cards unusable could be a way to stop yourself from contributing to your debt problem. Some people choose to put their credit card in the freezer, so it is out of sight and not immediately accessible. Others cut up their cards to ensure that they won't use them. At the very least, you should remove your cards from your wallet and leave them at home on a daily basis.

2

Set up a household budget. This task is daunting but absolutely necessary. You need to review your monthly bills and realistically assess how much you spend on things you don't need. There is software that can help you with this process, or you can sit down with a pen, paper and a calculator and add up the number based on your monthly billing statements. Subtract what you take home in monthly pay from the bills you have in that period.

3

Free up cash flow. There are several ways to do this. Call your credit card companies and ask for a reduction in your interest rate. If your payment history is good and your credit rating is also good, they will usually cut a deal with you. Talk to them about applying your payments only to the principal of your balance, rather than the interest rate. Sometimes, they will allow this, too. Call them and tell them you are having a difficult time making your minimum payment and see what kind of deal they will offer you. Credit card companies would rather get some of your money than have you default altogether. Consolidate your debt with 0% APR credit transfers. New cards usually offer 0% APR for a period of time and will transfer your balance from other cards to theirs.

4

Avoid using your debit card and use cash instead. Even if you've stopped using your credit cards, you can still overspend on your ATM card. Taking into account your budget, take out your weekly disposable income in cash. When you have spent it, don't take out any more cash unless it is absolutely necessary. Challenge yourself to have some left over at the end of each week.

5

Pay down your highest interest rate credit card first. Now that you have a budget and have increased your cash flow, pick the card with the highest interest rate and pay down as much as you are able each month. It's important to pay more than the minimum amount if you haven't cut a deal with your credit card company, so your money pays off the principal balance. Go down the list of your cards, highest interest rate first. This is when you need to have patience and be diligent. This process can take a couple of years, depending on the severity of your debt, but it will be worth it.