The new set of tires for your car, the spur-of-the-moment trip to Vegas, those cute shoes that you had to have -- it's easy to just hand over the plastic and charge purchases and worry about paying them later. But when the bills come in (and they always do), you might find yourself in a mountain of debt that seems impossible to pay off. With dedication and planning, though, you can pay back what you spent and be debt free.
Stop Using the Card
The first step to overcoming credit card debt is to stop using the cards. Take them out of your wallet and put them in a safe place. If you have your card information saved with any online stores, delete the information to avoid temptation. Discontinue any automatic payments that you have set up using the cards and pay with a check or automatic debit from your checking account each month instead. Do not close the credit card accounts, though. Closing the accounts will cause your overall available credit to decrease, which can lower your credit score.
Pay Highest Rates First
Interest rates and fees continue to add up on your credit cards even if you don't make any new purchases, and the higher the interest rate, the more you'll pay. Tackle the cards with the highest rates first. Commit to paying off those cards by paying more than the minimum payment each month. Read your credit card statement; by law, card issuers must include a payoff time frame on the monthly statements. This time frame will indicate how much you can save by paying a larger amount on your card. Or use an online payoff calculator that can help you calculate how much you need to pay each month to reduce your debt within a certain time frame.
Roll Over Payments
When you pay off one credit card, take the money that you were paying toward that card each month and add it to the payment for the card with the next highest interest rate. For example, if you are paying $200 per month to the card with the highest rate and $50 per month to the next card, when you pay off the first card, add the $200 to the second card for a payment of $250 per month. Keep rolling over the payments as you pay off cards, until the balances are paid off. If you get an extra influx of cash, such as a tax return or cash gift, use that money to pay off your credit cards.
Get Help
If you are drowning in credit card debt, and have trouble making the minimum payments, never mind adding extra each month, get help. A certified credit counseling or debt management service can help you pay off your debts within a specified period and save you thousands in interest charges and fees -- and help you keep your credit rating intact and stop collection calls. A debt management company will negotiate a lower interest rate, get fees and charges removed and develop a repayment plan that fits your budget and meets the creditor requirements. Do your research before hiring a debt management company, and avoid any companies that charge excessive fees for their services.
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