How People Can Get Out of Credit Card Debt

Credit card debt hangs over you and causes stress, especially if you have difficulty paying it off. Paying the minimum payment draws out the debt for several years and results in paying much more than you charged because of the interest. A realistic look at your finances and a plan to eliminate the debt gets your finances back on track.

Stop Charging

To completely pay off credit card debt, you need to stop charging on all cards. Small amounts add up quickly, plus accrue interest until they are paid off. Most charges made on credit cards are for things that you want but don't really need. Look at your spending habits to determine areas where you can cut back on spending. Concert tickets, vacations, meals out and clothing are all things you can live without. If you don't have enough money to cover your necessities without charging, look for other ways to cut spending such as getting rid of your cable or trading in your car for a used vehicle you can buy in cash. Once you stop charging, you can focus on paying down the balances.

Create a Payoff Plan

Your monthly budget gives you an idea of how fast you can pay off your credit card debt. Allocate money to all of the necessary expenses in your budget, such as housing, car payments, insurance, utilities, gas and food. Calculate the amount of money left over for extra expenses, savings and extra credit card payments. Pay as much as possible toward your credit cards. The common method is to apply all extra funds to one credit card balance until it is paid off. Move on to the next credit card and do the same thing.

Earn Extra Money

To pay off the credit card debt faster, take on a second job to earn extra money. Put all money toward the debt to make it drop. The idea of working more is unappealing to most people, but remember that it is temporary if you focus and work hard to pay off the credit cards as quickly as possible. Many retail businesses hire part-time employees. Another option is to baby-sit or do odd jobs for neighbors to earn extra cash.

Get Help

If you have difficulty keeping up with your payments or paying off your credit card debt completely, debt counseling is an option. A debt counselor evaluates your income and all of your bills and debts to help you create a workable payoff solution. Most legitimate debt counseling services provide a free consultation that won't affect your credit rating. A debt management plan helps you get lower interest rates on your credit card debts. The debt management company accepts your money each month and then distributes it to each credit card company, with whom it has negotiated rates and payment agreements.