Thread: Does anyone have a good solution to get credit card debt paid off quickly?

Work on them one by one, with low balance & highest rates your first focus. Then the savings you get after paying one off, use it to continue paying down the next card. Continue this process until everything is paid off.

Good luck!

I advice you to pay the credit card with highest interest rate will save you money in the long run from financial troubles.It is good to pay the lowest balance first.

Send money to the credit card company to cover what you owe, and then stop spending money that you do not have.

1.) Cancel all your unnecessary services such as cable TV, home internet, cell phone service, etc. You should only keep a service if it directly ads you in maintaining your job. So, if you need your cell phone for work, keep it, but do you really need that smart phone plan? Etc. Evaluate all your monthly services.

2.) Make a list of all your incomes, expenses (services, insurances, etc) and debts (credit cards, mortgages, student loans, etc). Don't worry about consumables (food, water, clothing, gasoline, etc.) yet.

3.) Add up your total income from {Month N-1} (i.e. If this month is February, {Month N-1} will be January, etc).

4.) Add up your total expenses from {Month N}.

5.) Add up your total monthly debt minimum payments for {Month N}. Again, this should be the minimum payment. If you have a credit debt that is a promotional 0% interest, but you have to pay it off by such-and-such, then compute what payment you would need to get 0% out of it, and consider that your minimum payment. If you have an amortized loan, such as a car loan, mortgage, student loan or whatever, just consider that monthly payment as “the minimum.” All other loans are probably going to be open-ended such as credit cards. Okay, so total up all your “minimums.”

6.) Take {Month N-1} Income and subtract {Month N} Expenses and {Month N} Minimum Debt Payments. This final value will be your Disposable Income. I’ll just call it that – go with it.

7.) Take all your credit cards and put them away in a place that is secure and you can’t get to it on a whim, such as a safe.

8.) Okay, so, this Disposable Income is going to have to get you through the month. You are going to eat on this, cloth on this, gas up your car on this, etc. You can’t use credit.

9.) Now, paying your minimum payments only will take you probably 30 years to pay off your debt. Not exactly “quick” like you asked. So, you will have to pay over these minimum payments in order to end your debt sooner and have more money in the long run.

10.) So, just pay your minimum payment for the very first month. This will give you an opportunity to get used to your new disposable income. I actually have a second checking account that I put this money into. I consider it my allowance and it prevents me from overspending and eating into the money that is saved for my expenses.

11.) Okay, so once you finish the first month, hopefully you will realize you have a bunch of disposable income left over. You are about to get your next month’s allowance, and you feel a bit foolish for having so much cash and paying only your minimum payments. So, here is where your personal financial ethics come into pay. Take a chunk of your allowance and put it towards the payment for the upcoming month’s debts. You should target the account with the highest interest rate (not necessarily the lowest principle). You will save more money in the long run if you kill the higher interest rate. Now, if you have a credit card that has funky stuff like fees or whatnot, target those things first.

12.) Okay, so you are into your second month. Hopefully you didn’t toss away so much money to your debts that you feel like you need to grab the credit card out of the safe.

13.) So remember, you are paying {Month N} bills using only {Month N-1} income. This means that you have all the money you need upfront. If you are not going overboard with your spending, then you should be ending each month with at least $0 in your allowance.

14.) As a credit card reaches zero principle, don’t cancel it unless it has weird fees and stuff. Just leave it in the safe until all your credit cards are at zero. Once they are all at zero, you should cancel a card a year or so until you get down to: 1 Major Credit card with reasonable terms (i.e. A Visa or Mastercard), and perhaps one special card that gives you some good savings on something you NEED (i.e. A 6-month interest free automotive credit card). You really shouldn’t have more than that, unless all this debt reduction has made you a credit card god!

15.) Don’t worry about your amortized loans until all your open-ended accounts are cleared up, but don’t stop doing your allowance and targeted debt reduction strategy. Get rid of your non-mortgage loans first. Again, start with the highest interest rate. You shouldn’t worry about your mortgage quite yet, because you get special compensations on your taxes for the interest you pay on your homestead. If you got other property loans, you should work them down too.

16.) Okay, that is all I have to say about that. Customize whatever you want to fit your particular situation. You won’t be able to recover from your past indiscretions unless you have new found discipline. Don’t beat yourself up over the person you were, just concentrate on being the person you can be.

17.) Good luck!

I was going to say something but "pawned79" hit it out the park! lol

The only thing I would add, is to call your creditors first to see if you can get a lower interest rate on your cards. Start with Customer Service and then ask for a Supervisor for help to lower your rate. Sometimes a simple phone call can save you thousands!

Maybe look into some balance transfers offers and move balances to a 0% for 12,18 months. That will help to have 100% of your payment go towards your balance and it will pay off the account much faster.

I hope my 2 cents help,

Scott

How can you say any more... you guys nailed it!

1.) Manage first your finances without the credit card in the picture.

2.) Determine how much is your allowable amount that you can spend to pay for your card if you cannot attain the said figure go for step number 3

3.) Check your CC's interest rate in terms of minimum monthly payment and while you still have a good credit look for a bank that gives a credit card which has a lower interest rate and make a revolving CC pay-off in which you transfer all your balances from your previous high interest rate CC to a lower interest rate CC. IN this way it will be easier for you to make a payoff amount if you can. It refreshes as well your credit and you minimize the collateral damages that your debt can make.

Great point by pawned79, I would say that if you are struggling then maybe consult a debt management company. The best thing to do is tighten your belt the best you can and leave out any luxury items and pay more then the minimum payment back on credit cards.