Wouldn’t it be great to be rid of all of your credit card debt? You can happen. I paid off all of my credit card debt, and you can too. About two and a half years ago I owed a little over $8000 to the credit card companies. Six months ago I made my final payment and felt such a sense of accomplishment. For the past six months I have lived debt free and have hundreds of dollars extra each month in my pocket. Here’s how I did it.
First thing’s first, you must be honest with yourself. The first thing I did was I gathered all of my current credit card statements and got a grand total of how much I actually owed. This not only helped me devise a plan, but opened my eyes to see the actual amount of debt I had. This gave me the motivation to stay on track with eliminating this debt. Next I gathered some information such as which cards gave me the lowest APR’s, what my minimum payments were, what my credit limits were, and how much room I had left on each one.
Before I did anything else, I called each credit card company to see if they could lower the interest rate I currently paid to them. Some of the companies budged while others wouldn’t. After doing this, I then began trying to figure the best way to transfer any balances from higher APR accounts to lower APR accounts. Because I wasn’t behind on any payments and I still had a decent credit score, I was able to open a new account I had seen advertised offering a 0% introductory balance transfer rate with a limit of $1500. I transferred my highest APR account (27.90%) of $1300 to this new account. I then transferred as much as I could to the lowest APR accounts I had so that I was paying no more than 14.90% on any one of my accounts.
The next step is the most important. Do whatever it takes to not use these accounts for any more purchases. What worked for me was putting all of my credit cards away in a box at home. This way I had them for an emergency, but not when I went shopping. I kept one credit card with a $500 limit in my purse, for when I did need to use credit, and paid it off every month, separately from my debt elimination plan.
Then, I just made my payments. I figured out how much money I was comfortable paying each month. For me, this number was $450. I made the minimum payment on each card except the one with the highest APR. On this account I paid the minimum payment and also applied whatever else I had left from my $450 budget. Once that card was paid off, I transferred that payment to the next highest APR account, and so on, and so on, until all five accounts were paid off.
Start today. Get organized, make a budget, make a promise to not use your cards anymore, and get rid of your debt. There is no doubt that you will be happy with the results.