Unfortunately, many individuals who find themselves in credit card debt aren’t sure how to go about beginning to pay off the credit card debt they’ve accumulated. Well, I can share some tips that work for many people.
First of all, you need to get angry at your debt. You need to mentally go to war with your debt and this means you stop putting fuel into this fire. Take those cards out of your wallet or pocket book and put them away. Ask a close friend to keep them for you. Better yet, put them in a bowl of water and put it in the freezer. It may seem childish but it keeps you from grabbing it next time you go out the door. Go to a cash only system till you have killed the debt.

Now it’s time to attack. A great place to start is with a spending freeze. Do a needs vs. wants analysis. Keep in mind that your needs should not total more than 25 different things. For example, you need shelter, food, transportation, phone, clothes, etc. Wants may be items like a cell phone, cable, memberships, private lessons and, yes, even Starbucks. I am guilty of that as well but I have a budget for it. With the extra money you have you can now start attacking the smallest balance first even though it makes more sense to pay on the card with the highest interest. We are looking for small victories. Not all of us can kill a goliath.

Pay off the card with the Lowest Balance

Paying off cards with a lower balance will allow you to pay off certain cards quicker than others. This will work towards faster results and may be a more encouraging method to pursue when paying off your credit cards. When it comes to paying off credit card debt, motivation is often underestimated. Once you payoff one card, you will have extra money to put toward the next card. Remember to keep making minimum payments on all cards while you are attacking one card at a time.

Paying on the Highest Interest Rate

In the long run, this method will allow you to save the most amount of money. It’s possible that this card may have the highest balance as well and if this is the case, you will be saving yourself an even larger amount of money by paying this card off. This may take you awhile so don’t let yourself become discouraged. If you feel like this might be demoralizing, you may be better off paying off cards with the lowest balance first.

For more help see post on money saving tips.

Jay A. Kumar

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