According to the Consumer Federation of America, the average credit card debt per household is $10,000 for families carrying a current balance, with 80 percent of United States households having at least one credit card. Getting out of this credit card debt is one of the most financially healthy and freeing actions a person can take. With a little effort, sacrifice and patience, you can be out of credit card debt sooner than you think.
Step 1
Stop using your credit cards. Paying off your credit cards starts with weening yourself from using them on a regular basis. Limit your credit card spending to emergency only, and only use your credit card with the lowest interest rate.
Step 2
Pay the highest interest rate card off first. Gather all your credit card accounts together and arrange them from highest to lowest interest rate. The higher the interest rate on the card, the more money it costs you to hold a balance on the card each month. As such, put any extra money each month towards paying off your highest interest rate card first.
Step 3
Pay at least the minimum on the rest of your cards. Although your focus will be on the highest interest rate card, all of your cards need to have at least the minimum monthly payment paid on them each month. This payment should be sent in as soon as you get the bill each month. Being 15 or more days late, even once, can have a negative impact on your credit card.
Step 4
Resist the urge to spend. Once one card is paid off, move the monthly payments from that card onto the next one. Resist the common urge to move the money that was being spent each month to pay off the first card to your pocket for spending. As you pay off each card, the rollover money will pay off the next card even faster. Continue rolling over the payment from each paid off card until you are credit card debt free.
Step 5
Consolidate your cards. If some of your cards have extremely high interest rates, consider transferring the balance from higher interest rate cards to those with lower interest rates. This only works if the card you are transferring the balance to has a smaller interest rate and a high enough credit limit. Do not open a new credit card account just to transfer a balance, and avoid payday loans or other high interest options to consolidate your debt.
Step 6
Negotiate a settlement with your creditors. If you get a bonus from work or a tax return check, consider putting that money towards credit card repayment. Call your credit card companies and ask for a settlement offer. You may be able to settle for much less than you owe if you are willing to pay the balance off immediately, especially if the account has been charged off or sent to collections.
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