You are not alone if your credit card debt has resulted in a serious financial crisis. Some people find it difficult to manage money, including credit card debt. If you are paying only the minimum balance each month on $10,000 or more of credit card debt, it can take you 20 years or more to pay off your credit cards. In most cases, bankruptcy and debt consolidation are not the best methods to eliminate credit card debt. You can take steps on your own to actively pay off your credit card debt.
Step 1
Use cash instead of credit cards to make purchases. If you find yourself frequently tempted to use a credit card, then the best thing might be for you to cut up your credit cards. Do not apply for any new credit cards even when you receive unsolicited credit card offers.
Step 2
Negotiate with each of your credit card companies for a lower interest rate. You can pay off credit card balances faster if you are able to pay more on the balance and less on interest. Some credit card companies are willing to lower interest rates, but you must ask. If a company agrees to lower the rate of interest, you will need to demonstrate your ability to make timely payments on your credit cards each month.
Step 3
Arrange a payoff for any credit cards with small balances. Contact each credit card company to offer a payoff. Some companies are willing to accept a percentage of the entire balance as a payoff. For instance, if you can afford to pay 60 percent of the total balance, call the credit card company and let someone in authority know that you will pay 60 percent of the balance immediately if that amount will be accepted as payment in full.
Step 4
Pay the maximum amount that you can afford each month on your credit cards. By paying more than the minimum amount due, you can eliminate the debt more quickly. If possible, try to make a double payment on one or more of your credit card balances. Begin by paying the most money on the credit cards with the highest interest rates.
Step 5
Apply payments you were making to a credit card that you have paid off to one of your other credit card balances. Financial guru Suze Orman suggests that once you pay off one of your credit cards, you should continue to apply the money you were paying on that card to one or more of your other credit card balances (see Reference 2).
Step 6
Practice healthier spending habits in order to avoid accumulating new credit card debt. Use credit cards only to make purchases that you can pay off in full each month. If you find that you are unable to keep up with credit card payments, use cash instead. You cannot eliminate credit card debt if you only add more debt after you have worked hard to pay off other credit card balances.
Tips and Warnings
- When asking a credit card company to offer you a payoff settlement, explain why you need assistance in paying off the debt. If you have a legitimate reason for making the request, the card issuer may be more willing to help.
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