Tips for Paying off Credit Card Debt

Do you want to improve your financial situation? Perhaps you are ready to buy a home and put your hard earned money towards a home instead of letting it disappear in paying rent. But you look at your credit report and see your credit card debt is too high. What can you do? Here are some tips to lower and eventually eliminate this debt!

• Pay more than the minimum payment
  
• Stop charging
  

How can these tips help you? Charge card companies want you to take a long time to pay off your credit cards. This is how they make money. So when you arrange your budget by only paying the minimum payment, you are actually hurting yourself. When you add the interest to what you purchased, oooh you have paid a lot more for it than the item is worth! You say you bought it on sale and found a great price! Well, if you are paying interest for that item, in a short time your savings is lost.

Never allow yourself to accept paying minimum payments. If your budget doesn't allow you to pay more than the minimums, then you must take drastic action. You may have to get another job to help you. Once you have a little bit (like an extra $10, $50, or even $100) extra to put toward those balances, you are ready to make a change in your life.

When you can pay this little bit extra, now you can begin to compound your payoff efforts. Take the account with the smallest balance and put the extra money on it first. Pay minimums on all the others if you have more than one credit card. Once that one is paid off, take the money you were paying on it each month and apply to the next account with the amount you are already paying as a minimum balance. This is already in your budget. It does take discipline to do this. You duplicate this effort until all your cards are paid for. But for this to work you must follow the next tip.

Stop charging on all the credit cards. Make a pledge to yourself that you will only use cash for all your purchases. If you do not have the cash for an item or cannot afford to pay cash to eat out, don't do it! You cannot get out of credit card debt unless you stop using them. If having them in your wallet is too much of a temptation, then destroy them.

If you receive unexpected income, discipline yourself to use it to pay extra on your credit cards. The feeling you will have as you get control of your finances is an awesome feeling.

To show you that this works, a friend of mine had a charge debt in the $20,000 area. He applied these principles and found he could afford an extra $100/month toward his charge debt. He started with the smallest and that one was paid off in five months. Then he took the minimum payment, finance charge and the extra $100 and put it with the minimum payment on the next account. He also only paid cash for anything and stopped using his cards. In no time he had these high balances gone!

Another friend of mine handled his situation a little differently. He and his wife had difficulty with discipline, so they sold everything. I'm mean everything but their car and their clothes. Their home, furniture, appliances, etc., you get the picture. They lived six months with each of their parents and took most of their income to pay off their credit card debt. It took them about a year. It wasn't fun to live with each others in-laws for six months, but they were determined to get control of their finances. In a year they had all their charge accounts paid off. Now they were able to buy a home and start over. This time they were more disciplined in their purchases.

So it can be done. If you just do not have the discipline, then you may need to get help to pay these off. But the discipline you learn by paying them off yourself will help you all through your life.

Jeffrey Ragan has several years of experience helping people reach their goals and wants to help you learn more about any other credit repair tips and other helpful information on their website, First-Time-Home-Buyer-Solutions.com.