Credit Card Debt Help

There are so many millions of Americans in debt right now – deep debt – and probably only a small handful of them manage their accounts well. In this article I’m going to share with you some tips and recommendations that these people are using to get out of debt, and stay out.

Any time you receive some extra money you should make a micro payment towards your credit card debt. Your earnings could be from eBay, a garage sale, or money from overtime or a part-time job. Send in the money or pay online with it as soon as you get it. Don’t hesitate. It might not seem like much at the time, but it definitely adds up. Besides, if you put the money into your bank account instead, chances are you’ll just end up spending it rather than using it later in the month to pay our debt.

Transfer most or all of your balances to a low-interest credit card. Check out creditcards.com if you don’t know which ones cards are low-interest. The lower the average interest rate on your remaining credit card debt, the more of a dent in your remaining balance you’ll make with each payment.

You’ll find life much easier if you can successfully pay off your smallest debts first. Continue making the minimum payments for each card except for the one with the smallest amount of debt. Throw everything you’ve got left over at the smallest one. You’ll find that there’s a great psychological advantage when you can bring one or two balances down to zero, and there will be a difference in interest charges too. A lot of people argue against using this method, saying that the mathematics behind it doesn’t work. But in reality, if you were great at math, then you wouldn’t have any credit card debt to begin with!

Most people don’t know that the interest you have to pay is calculated based on the average daily balance of your account for the entire month. So divide your minimum payment in half and pay that amount twice a month. By making half your payment every couple weeks, you’ll reduce that average balance and therefore reduce the final charge at the end of the month. Just don’t wait to pay a single payment at the end of the month. Plus, dividing your payment in two might actually make it easier for you each month. How? Paying two smaller payments will smooth out your budget because you won’t have to come up with an entire payment at the end of the month – just half twice. A great time to make these payments would probably be when you receive your paycheck.

As you begin paying balances off, you need to close out all but your oldest one or two credit cards. One of the factors that attribute to your FICO score is the length of your credit history, which will be negatively affected every time you start a new account for a new credit card. By closing your newest accounts, you’re actually making the average age of your credit history older. If you don’t feel confident enough to manage without your credit cards, consider something a little more drastic that will force you to make the change: cut up your cards and live on a cash basis. However, do this only if you’ve got a full emergency fund of some kind in place that will last you at least five or six months of paying expenses.

Sometimes you’re only left with one option – finding an additional job. It might be the only way to generate a bit of cash flow above and beyond your normal monthly earnings. However, this should only be considered as a last resort, especially for families, because most of the time it means that one parent will have to be away from his or her family for long periods of time each day. I say that only because I believe families are very important. Working a full-time job and a part-time job is also going to make for a very long, hard day. You might even think about earning money from smaller side jobs, like mowing lawns, submitting articles online to paying directories, or volunteering for overtime at your current job. All this extra work will allow you pay off your debt even faster and move you along the path to being debt-free.

I’ve saved the most important until last. This one might seem obvious to you, but you’d be surprised how many people (perhaps including yourself) fail to follow this step! The first step to getting out of any hole is to stop digging! The same goes for debt. If you can stop charging, then you’ll be able to come up with a plan for getting out of debt. Perhaps this vital step will require you to literally cut up your cards, or at least take them out of your wallet and leave them at home, but I assure you – you MUST stop charging to your cards.

If you can follow this credit card help advice, you’ll be well on your way to being debt-free! But you must make it a priority in your life if you’re serious about it. You must to be willing to temporarily sacrifice your other financial goals for a while so that you can put every extra penny into paying off your debt. Don’t keep putting it off. Don’t wait until tomorrow. Tomorrow is just an excuse away. Start today!