Get Out of Credit Card Debt

The key to using credit wisely is to avoid unnecessary debt. However, if you find yourself overwhelmed with credit card bills, follow these steps to get out of debt:

1. Immediately stop charging anything additional on credit cards.
2. Find out how much is owed.
3. Pay more than the minimum payment.
4. Send in payments as soon as the bill is received (every extra day you carry a balance, your interest charges accumulate).
5. When one card is paid off, make the same payments on another (resist seeing the extra money as spending money).
6. Refuse the credit card issuer's offer of a minimum payment of zero or to skip a payment for a month.
7. Consolidate cards (make sure to cut up the cards with balances that are now zero).
8. Refinance high-rate credit cards (shop around for the best interest rate).
9. Consider using savings to pay off high-rate credit card balances (only if you already have a three-to six-month emergency savings fund).

Credit handled wisely is a wonderful thing. The benefits of having access to credit and a positive credit report are numerous. Conversely, not understanding credit and making unwise decisions can affect you negatively for years to come.

Previous: Using Credit Wisely  |  Next: Helpful Tools