A 3-Step Approach To Getting Rid of Credit Card Debt
Your Grandma Was Right About Credit Card Debt
My grandmother always said that credit card debt was evil, regardless of what the credit card companies wanted us to think. Turns out she was partially right. It's so easy to get into a little bit of debt, then figure "what's a little more?" and before you know it, you're thousands (or tens of thousands) of dollars in the debt hole.
Sound familiar? Well I'm gonna tell you something the credit card companies don't want you to know. I'm going to tell you exactly what you need to do to get rid of that credit card debt once and for all.
Stop Using
For many people, credit cards are a drug. Don't believe me? You should see my girlfriend with a piece of plastic in a Coach purse store. It's worse than any drug-induced high I've ever seen. She'd have no problem racking up thousands of dollars of debt in an hour if I had any problem grabbing that credit card right out of her hand and running out the door with it.
Fortunately for her, I can (and will) do that if need be.
So what's my point? My point is this. If you ever overspend on your credit cards, stop using your credit cards. Treat them like an addictive drug. You've got to quit cold turkey. No "just this once" and no "but I really need this" excuses. Stop using your credit cards, period. Smash them, shred them, freeze them or burn them in the fireplace for all I care. Just don't use them.
Analyze Them
Now that you won't be using your credit cards any more, you should have some free time on your hands to analyze the damage that's been done. This means gathering all of your credit card statements and keeping a spreadsheet of how much you owe on each card and how much interest each charges.
Create The Game Plan
Once you've analyzed your credit card debt and you know exactly what you owe and to whom and how much interest each party is charging, it's time to plan a course of action. First, create a monthly budget and compare it to your monthly income. If you can't pay at least $200 per month more than the minimum monthly payments on your cards, it's time to start cutting unnecessary expenses. And my friends, cable and cell phones can indeed be unnecessary expenses.
Once you have at least an extra $200 a month to put towards your cards, decide which card to pay off first. This will ideally be the one with the lowest balance. When one card is paid off, take the $200 per month plus the minimum monthly payment that card had been requiring and add it to the minimum monthly payment of the next card you're going to pay off. Continue doing this till all of your credit card debt is paid off in full.
Once you've completed the above steps, you'll be debt free and loving life. Just make sure you keep those credit cards in whatever grave you left them. You don't want to turn the above program into a "rinse and repeat" situation.
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