My 3-step Method to kill your credit card debt

Here’s a long one…

So, you’ve got nice shiny credit cards and big debts to go along with them :ohman: and you’re wondering why you just can’t kill your credit card debt. In my previous post, I wrote about one of the reasons why folks just can’t rid themselves of credit card debt. This post, I’ll share with you my super-duper three-step method to kill your credit card debt. Will it hurt? Yes and No, depending on how serious you are about killing your credit card debt and the type of person you are. Notice I used the very extreme word “KILL” and not a nice one like “clear” or “settle”? Well I believe that’s how everyone should approach their credit card debt – to KILL it! Let’s get on with my super-duper three-step method to kill your credit card debt.

Step 1 : Stop using your cards.
Kill your cards. Cut them up. Burn them. Bury them. Anything, as long as you stop using your cards. Carry only one and use it only for emergency purposes. When I needed to kill my credit card debts a while back, I wrapped my credit cards in a plastic bag, and then taped it all around with cellophane tape. That made sure that I would only use my cards in case of emergency. Trying to use it any other time would be painfully embarrassing!

Step 2 : Pay a lot more than your minimum payment.
Like I said in my previous post, minimum payments are a devilishly clever way of making sure you’re always paying back to the banks. Use this tool to calculate your minimum payments and you’ll see why. :hmm: Always pay a minimum of fifty dollars more than your minimum required payment. If you can’t afford that, then refer immediately to the next step.

If you have more than one credit card, then you need to concentrate on killing the one with the highest balance or highest interest charges first. If you have to, keep paying the minimum payments for the other cards until you clear the debt for that first card. Now here’s a secret: Once you’ve killed the balance for the first card, add the cash meant for the first card to the payments for the next card. In other words, assuming you were paying $500 per month for the first card and $250 for the second card, once you’ve finished killing your first card’s debt, add the $500 to the second card’s repayments. That would bring your repayments for the second card to a whopping $750! This should shorten your repayment period by at least half if no more.

Step : 3 Change your lifestyle.
Now here’s the where it really gets tough. We get ourselves into debt because we spend more than we could afford. The trick here is to spend within our means. Sounds easier said than done. If you’re one who likes to keep up with the Joneses, then changing you lifestyle is going to hurt, but hey… it was easy to get yourself into debt, so you should expect the opposite trying to get out of it!

The first thing you need to do is to make a list of everything that you spend your money on. Then cut out the unnecessary expenses and trim the rest as much as possible. You’ll need to do it for as long as you still have a credit card debt. It will seem hard at first, but as you continue to be frugal and you actually see how little you really need to get by, then you might even opt to change your lifestyle permanently. It may even be good for your health. All those trips to the restaurants and fast food joints quickly turn into a bigger waist and poorer health.

Killing your credit card debt is a major hurdle to overcome before you can take control of your financial well being. A healthy bank balance also affects your stress level and the relationship with your spouse and family. And finally, who knows… you might just have enough to put aside every month for that dream of yours of starting your own business.

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