Revealed – How To Pay Off A Mountain Of Credit Card Debts

cutting up credit card with scissorsThere was an article recently on the website Yahoo! Finance titled “How to Pay Off A Mountain of Credit Card Debt”. I thought it made good sense, especially given the fact that the average household today has about $15,000 in credit card debt, which can make it very difficult to make ends meet. If you find yourself laboring under a mountain of credit card debt, don’t get discouraged. You can pay it off.

Understand why credit cards are risky

Credit cards can be risky for a couple of reasons. First, they can lure you into the trap of spending money you don’t have. This is because as research has shown, we tend to feel more pain when we pay for something in cash than when we swipe a credit card. Second, credit cards have minimum payments, which can keep you indebted for a very long time. In fact, if you make just the minimum payments on a card, you will see that your balance rarely shrinks or maybe even continues to grow, which drags you even deeper into debt.

The interest rate

Some credit cards come with extremely high interest rates of 25% or even 30%. But even if you have a rate such as 10%, you’re still losing money every month if you carry a balance forward. The net of this is that interest will quickly accumulate, which can work to keep you in debt for a very long time.

Make a plan of attack

So how do you pay off credit card debts? You need a battle plan. First, make a list of all your current balances and interest rates. Put them in order with the card that has the highest interest rate first down to the one with the lowest rate. You then want to “snowball” your debts by paying off the card with the highest interest rate as this will save you the maximum amount of money in the long run. Sit down and determine how much you can pay in total against that card. Once you eliminate that debt, you can move on to the card with the second highest balance and so forth. Just make sure you continue to make at least the minimum monthly payments on your other cards.

Treat the debt as if it were an emergency

As this article explained, you should view your credit card debt as an emergency. This means doing everything you can to get out of debt as quickly as possible. If you can become expert at budgeting, this will help speed up the process. You need to make a budget and then stick with it every month, while finding new ways to save money. As an example of this, if you find you spend a lot on groceries, try shopping at a different store or by curtailing those impulse purchases. Finally, try to earn some income on the side in addition to your regular job.

Share your progress with friends and family

This article also suggested that if you share the progress you’re making towards paying off your debt with friends and family, this can help you stay motivated. You should also write down your goals and, if possible, include a picture of one of them that will motivate you such as a vacation, your retirement or new house. Be sure to put the picture someplace where you can see it every day.

Check out debt settlement

If none of these tactics seem to be working for you and you still can’t whittle down that mountain of debt, you might want to check out debt settlement as offered by companies such as National Debt Relief. It’s helped thousands of Americans reduce their debts and become debt free in four years or fewer.

Ready the complete article by clicking here