5 Surefire Ways To Eliminate Credit Card Debt

Do you have enormous credit card debt? You are certainly not alone. According to research, the average family in the United States has $7000 in credit card debt and pays about $1000 in interest each year! Throw in a late payment or two, or an over-the-limit charge, and that number skyrockets. Imagine what you could do with that $1000 if it weren't being spent on interest.

Let's imagine for a moment that you have $5000 debt on one credit card that is charging you 17.5% APR. Let's also imagine that you pay only the minimum due of $25/month on this card. Guess what? You will never pay it off! The interest alone on this card is $73/month!

That means that each month you get further and further into debt. By the time you have been paying on this $5000 for 10 years, assuming you have not used the card during this entire period of time, you will owe $20,385! That's over $15,000 in interest. If you triple your payment to $75, it will take you over 20 years.

So, what do you do? How do you get out of debt and use that money towards other necessities, savings, and investments? Here are a few simple methods that you can use without having to go to an expensive financial counselor.

Tip #1: Cut Up Your Cards

The very best way to reduce your credit card debt is to STOP using your credit cards! There is no need to have more than one card, so pick the one with the lowest interest rate and cut up the rest. The one you keep should be deemed an 'emergency card." These are true emergencies, not mere inconveniences. For instance, buying a new TV would not be an emergency, but renting a car in order to get to the bedside of a dying loved one would be. You can carry your emergency card with you, but don't make it too easy to use. One good suggestion is to cover the card tape and paper and write on it: For Emergencies Only.

Tip #2: Move Your Debt

If you have more than one credit card payment, you may want to consider moving debt from a card with a higher APR to one with a lower APR. This will lower the amount of money you are spending towards the interest and get you out of debt faster.

Tip #3: Use the Snowball Principle

List all of your credit card debts, and the amount you are paying each month. Pay off the lowest amount first. Then use that money to start paying off the second lowest amount. And then the next and the next. Let's look at an example.

If you have a $7000, $5000, and $2000 card with payments of $150, $125, and $100, you will finish paying off the $2000 card first. Once it is paid off, you take that $100 and put it towards the $5000 credit card. That means you are now paying $225/month. You have increased your payments which will pay off that credit card sooner and will have you paying a lot less in interest. Once that is paid off, you apply the $225 to the $7000 card, making your monthly payment $375. This will greatly accelerate the payment of this card, reducing your interest payments even further. When everything is paid off, you now have $375/month extra to put towards savings or investments!

Tip #4: Prioritize Your Debt Repayment

One of the best ways to pay off your debts is to get rid of the highest interest payment first. Looking back at the snowball example, you took the lowest and paid it first. If, however, the $2000 card had the lowest interest rate, you would want to pay off the card with the highest rate first. This will save you much more in interest payments.

If the math gets too hard here, don't despair. There are many places on the Internet where you can find good debt reduction calculators. It is then just a matter of punching in your numbers and reading the report.

Tip #5: Consider Consolidation

If you own a home, you may want to consider consolidating your debt using a home equity loan. Since a home loan is a secured loan (they can take away your house if you don't pay) you have a much lower interest rate than you do on your credit cards. Paying a lower interest rate is always a good thing! Not only that, but the interest you pay on your home loan is tax deductible. This is NOT true for credit cards.

By following these tips, anyone can take control of and completely eliminate credit card debt.

Wesley Atkins is the owner of http://www.credit-cards-advisor.com- which aims to get you fitted with the best credit cards to suit your situation. With numerous credit card articles and easy online credit card applications you will never choose the wrong credit card again.

---

What is the Check 21 Act?

Check 21 is the common name for the Check Clearing... Read More

Protect Yourself Against Identity Theft

Identity theft is when someone uses, without permission, your personal... Read More

Collection Agency Secrets for Collecting on Bad Debt

Getting worried that one of your clients, customers or patients... Read More

Beware the Shopping Mall Monster

Like me, you've probably been offered a fair old number... Read More

Secured Credit Cards- Consumer Tips

Whether you have no credit or damaged credit, secured credit... Read More

Credit Report ? Check Yours Regularly - and for Free

In the twenty-first century, there are few documents that have... Read More

Start Building Credit Fast!

There are a couple of reasons for this. You can... Read More

Credit Report Disaster Through Mistaken Identity

I've got some very important info I want you to... Read More

Credit Counseling -- Why It Doesnt Work For Most Debtors

"Cut Your Payments in Half!" the headline screams. "Consolidate Your... Read More

Rate Tarts Losing Ability to Cherry Pick

A "rate tart" is someone who switches from one zero... Read More

Cash Advance ? How Does It Work?

If you want a cash advance or a payday/paycheck loan,... Read More

Improving Your Credit Report

Even if you think you have a wonderful credit report,... Read More

Five Reasons to Repair Your Credit Score - You Can Do It Yourself

There are multiple reasons that tell us why we should... Read More

How To Save Money On Credit Cards

Some credit cards offer a cash advance option. But how... Read More

Discover the Parts of a Credit Report and What They Mean

So you ordered a copy of your credit report to... Read More

What Does Your Credit Score Tell You?

When you apply for a loan or a mortgage, the... Read More

3 Ways to Improve Your Credit Score by 50 Points In Less Than 30 Days

In Less Than 30 Days. "What can you do to... Read More

Credit Cards and How To Choose Them:

It may seem like a simple question but its important... Read More

Bad Credit Credit Cards

Chances are you've gotten your share of offers like this... Read More

Shoppers Beware - Tis The Season

It's the number one complaint from consumers and it only... Read More

How To Get a Low Interest Credit Card

Consumers often have the first credit card that they ever... Read More

Credit Card Security Advice

Which of the following is the biggest threat to your... Read More

14 Common Credit Mistakes

Establishing credit and wisely managing your credit becomes easier when... Read More

Give Yourself Credit

The Beginning of the Credit Card EraIn 1951, Diners Club... Read More

10 Ways of Reducing the Risk of Identity Theft

1- Check your credit report regularly2- Secure personal information in... Read More