Easy Way to Pay Off Credit Card Debt

The average American household carries around $15,000 in credit card debt, with the average annual interest rate around 14 percent. Most consumers carry three or four cards. With unemployment concerns rising, paying off this credit card debt has become a higher priority for many households. While the total balance can be overwhelming, the process of paying off the debt is not. With just a few easy steps, you can start watching your credit card debt go down.

Instructions

1

Commit to paying off the credit card debt and not accumulating additional debt. Cut up your cards or put them away for safekeeping.

2

List each credit card you hold and the current balance on each. If you've used the card recently, you may need to call the credit card company to find your current balance.

3

Determine how much you can afford to pay on your credit card debt. Add up your monthly take-home pay from all sources. This may include wages, Social Security or unemployment compensation. Add up your monthly expenses. Subtract your expenses from your monthly income. This is the amount you can pay on your credit cards.

4

Allocate the amount you have to pay down debt between the credit cards you are carrying. Pay the minimum amount on the larger balances and the rest on the smallest balance. The card with the smallest balance will be paid off first, giving you a sense of accomplishment and motivating you to continue.

5

Schedule automatic payments from your checking account for each of your credit cards, using the amounts you determined.

6

Review your progress every four months. When your smallest card is paid off, discontinue the automatic payment on this card. Adjust the payments on the remaining cards.

7

Continue this process until the credit card debt is eliminated.