Secrets to Paying Off Credit Card Debt – A Debt Solution For Everyone

Stop Spending.

The biggest secret to paying off debt is to change one’s behavior, in other words stop using those credit cards. Put them away so you don’t have easy access to them. Once they are paid off, keep the account open. It will help increase credit score ratings.

Plan and budget to avoid overspending.

Develop a budget. Write down all monthly bills and expenditures to see where the money is being spent. Then cut down on unnecessary items like expensive lattes. Take a lunch to work. Stop dining out. Combine trips to the store to save on gas. Clip coupons to save money at the grocery store.

Learn to negotiate with creditors. Ask for lower interest rates, waive fees etc, or enlist help of paid debt solution companies. A legitimate debt relief company can help you get out of debt if you are in over your head.

Now when it comes down to actually paying off debt, there are a couple of do-it-yourself methods that can be used:

The first method is to pay off the credit card debt with highest interest rate first. Mathematically this debt solution makes the most sense in the long run because you reduce the total amount of interest paid and you get out of overall debt faster. People with discipline should use this method.

The second approach is to pay off the credit card with the smallest balance first then apply that monthly payment to the next debt in addition to any extra amount that you can afford. This debt solution is sometimes referred to as “snowball method”. You may have heard of this solution as it is taught by Dave Ramsey. This method has a tendency to motivate people as it easier and faster to pay off small balances first. Once the first debt is paid off, people feel much better psychologically. That builds confidence and motivation.

Once you have debt under control you could then consider adding an additional 5 % to 10% to the payment get out of debt even faster.

Credit card interest is almost always compounded. That means you pay interest on top of interest. One way to mitigate that is to create an online account with the credit card company and make several small monthly payments to pay the finance charges and then one larger payment to pay down the debt.

Any approach requires discipline. But with persistence and consistency you can achieve anything. By Brian Miller

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