How to Eliminate Credit Card Debt

The number one way to begin reducing credit card debt is to establish a budget that limits new charging and stick to it. Without a budget of some type, your personal finances just roll along out of control. Once a budget is in place, this will let you know when you actually have spare cash, or you’re just fooling yourself into thing you do.

Many people spend the extra cash at the end of a given week without realizing that next week will have extra expenses. When the new week gets tight financially, out comes the plastic. This is what got you into credit trouble, and it will keep you there if you let it. Without new charges, your balances will begin to fall. It may seem slow at first, but down is still better than up.

When your budget does have extra cash, put it back into a savings account. Once this account has built to a point where most emergencies can be handled without taking on additional debt, start using your surplus to reduce the card with the smallest debt. Only pay extra to this one account. When it hits zero, start the procedure on the card with the next lowest balance. Try to add the payment from the first card on top of each month’s payment to the next card.

Don’t lose sleep over the larger debts. Just keep making payments and working to pay of the lowest card. Eventually, you will have paid off another card. Just keep repeating the process until you’re debt-free.

If you debt is so large that you can’t keep up with the payments even with a budget, then you need to get credit counseling. Many times, you can get a third party debt relief agency to help you negotiate settlements with your creditors that will be far less than your current balances. Be careful to get an agency that will actually help you retire your debt and not become another bill you owe. Check out several companies before leaping unless you have a friend or relative that’s already had good success with someone.

Be aware, that the minute you go through a debt relief agency your charging days are over until your balances are paid in full. Be certain that you can go this route for the next 1 to 5 years. If not, bankruptcy may be your only option. For this, you will need to consult an attorney.