Ring up enough credit card debt and you will be left feeling hamstrung by high interest rates and skyrocketing monthly payments. You may even have your credit line decreased with little or no notice. The solution to credit card debt is twofold: First, stop using your credit cards. Second, pay down the credit card debt, either as a lump sum or a bit at a time as you are able. The quicker you can get those balances down, the less interest you will pay and the more money you will have left.
Step 1
Stop using your credit cards. If you have enough willpower to possess a credit card without using it, consider tucking one credit card--the one with the greatest available balance--away for use only in case of an emergency.
Step 2
Cut up all your credit cards, except for the emergency card. If you cannot trust yourself not to use the emergency credit card for frivolous purposes, you will have to cut that one up as well.
Step 3
Set up a budget and stick to it. List all your sources of income along with all your regular monthly payments. Include rent, utilities, credit card payments and so on--along with estimates of anything else you might expect to pay for, like food and gas. Do not forget to put at least a little bit of money into savings every month, also, to help keep you from having to use your credit cards in case of unexpected expenses.
Step 4
Pick one credit card--experts usually recommend starting with the card that has the highest interest rate, but some consumers prefer to start with the card that has the lowest balance so as to achieve a $0 balance sooner--and set aside as much extra money to go into that card every month as possible. Make this a regular item in your budget. As soon as the card in question is paid off, or paid down to your goal--experts recommend carrying a credit card balance below 30 percent of your total debt to have the best credit score possible--direct the money from that payment toward another credit card.
Step 5
Negotiate with your credit card companies for a lower interest rate or to settle the debt outright for a lump sum.
Step 6
Consider debt management or consolidation. This should be your last resort because it often requires you to stop paying on the accounts and sends them into default before you can attempt a settlement.
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