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Tips For Eliminating Credit Card Debt

Jan 10, 2008
Getting rid of your credit card balances can become a reality for you instead of just something you dream about. It may seem like an impossible task when you look at the big picture but don't let those amounts frighten you. Focus on what you will do with all the money you save on interest after they are paid in full. If you continue to pay only the minimum balance though those bills are going to haunt you.

Sit down with your family and discuss the issue of credit card debt. This way everyone can understand the benefits of taking care of the issue. Make a written budget that includes all of the necessary expenses. Reduce those you can while still accommodating family desires. For example you can agree to have a family movie night with rentals instead of going to the theatre to see the latest flick.

Make a separate list of all your credit card debt. List the amount owed to pay it off in full, the interest rate, and the name of the creditor. Agree not to place anymore charges on any of the credit cards unless it is a dire emergency. This way you will continue to see those balances drop. The one you want to take care of first is the one with the highest rate of interest, not the one with the lowest balance.

Sometimes transferring balances can be a good idea to help lower your interest rates on credit cards. You need to be careful with this though and look at all of the guidelines. You may think you have found a terrific deal as the interest rate on the transfer is 0% or very low. However, it is likely only for a set amount of time and if you don't pay the balance in full by then it will be more than what it was initially.

Some people think it is best to pay off credit cards with lower balances first. This isn't going to save you money though so do it the other way. When you make a $50 credit card payment only half of it may be going to the balance and the rest to interest. If you can make a $100 payment though 75% of it will go towards the balance and you can see the amount you owe dropping each month.

After you pay off those credit cards, you may loosen your spending habits somewhat, but don't let them get out of control. A good portion of what you were paying for credit card debt should be going into savings. This can be for future expenses, large purchases, and even to enjoy a family vacation from time to time.

In order to get rid of your credit card balances you first have to identify your spending habits. Most people use credit cards for much more than emergency purposes. You may have to sacrifice a vacation, new furniture, and many other things you generally charge. However, you can definitely benefit from getting rid of those credit card bills. Even if you have to temporarily get a second source of income you should do it.

Don't give up on eliminating those credit card balances. Incorporate a plan to make it happen. It may take a couple of years but that time is going to go by anyway. If you still carry balances on those credit cards you will be throwing a large amount of money away during that span of time. Instead you could be saving it and earning a return on it. You can access this savings to pay for the things you want or to pay for unexpected expenses that come up.
About the Author
Robert Bain is fascinated by the secret credit industry. He follows personal credit related issues such as credit cards, debt relief, home owners loans, andmortgages.
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