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How to Get Control of Your Credit Card Debt

By Charles Hopkins Published 01/2/2008 | Finance
veryone has some credit card "fear" right now. The holidays are fast approaching or some other pressing need such as remodeling your home, or medical bills have left you with a credit card (or two or three) that is close to being "maxed out". Wondering if you will ever get this card paid back to a flexible and comfortable minimum amount is a real life "fear" right now in today's society. This article will give some advice on how to get control and limit your credit card debt.

First, realizing there is a problem is paramount. That is not as simple as it sounds as many people simply charge and charge and charge and want to confront the debt later. Well, this is later...now is the time to put a stop to this hole in your finances and get control of the credit cards in your wallet. Do not make the mistake of pushing the problem under the rug and thinking it will go away. It will not.

Next, make a list of all your cards and the amounts due and the dates due for each card as well as the interest rate on each card. Then put the list in order as far as the highest interest rate with the lowest balances. This list is going to be your first accomplishment in the road to credit card financial responsibility.

Now pick out one, two or three cards that you feel you should work on based on the lowest balances and highest interest rate. Take the number of cards, the minimum payments and the first due date of the card. The first due date is your target date. What is going to happen is, you will take the minimum balances and add another payment to this amount. Double the payments that are due in other words. If it is affordable to take three cards at once and make double the payments, that is fine. If not, then take the number of cards that are affordable and double the payments by the first due date that is your target date.

And, by the way, make sure that you are not fooling yourself in what can be afforded to put towards these credit card payments. There are very few things in your life that is as important as getting these credit cards under control. Maybe you should pack a lunch, combine trips out, put off purchasing that new skirt or outfit, do not buy that new purse, say "NO" to events that put you in a financial bind, and, in general, find ways to save a little more money to put towards paying off these debts. Making small sacrifices really does feel wonderful when the debt goes down and control of your spending and your debt is restored.

Go through the list of cards this way and make double the payments by saving in other areas of your life. It will not be easy. Take a month and write down every penny that is spent, the amount and the item being purchased. There will be many areas that can be cut back on and put that money towards paying off your credit cards.

The idea is to pay down the cards that are costing you the most in regards to interest rate. You will be more enthusiastic about saving money to put towards the debt when you see positive results this way. You can even chose cards that have the smaller balances if you feel you need that positive reinforcement of seeing the accounts becoming "paid off" faster.

Of course, clearly the cards must not be used for any additional purchases. Simply act like you do not own a credit card for a short time. You cannot spend your way out of this debt and you must stop the spending so that the payback procedures can work. Pay cash and remember how it felt before you had credit cards; it is really a great feeling.

Remember, even a small amount adds up when you are paying off your principle and not your interest. Think of it this way: Your minimum monthly payment is your "interest" and your extra payment is your "paydown amount". You will soon be wanting to add more to that paydown amount as you see the balances dwindle. You will also realize that the effort is worth it as the cards start showing a more positive balance. It makes breathing a lot easier once the debt is under control and within being paid off. It soon becomes a fun game to find more money to apply to the debt as you see the results of your paydown efforts. Payback of credit makes a person feel in control and more likely to keep debt within reason in the future and that future is important to everyone.