5 Easy Steps for Credit Card Debt Freedom

 If your credit card spending has caused a stack of debt to pile up, it’s time to reverse the trend! With focus, discipline and patience, you can reduce and eliminate your credit card debt, no matter what the amount. Here’s some tips…
  • Create a detailed list of each debt, including the name of the debt, the amount, the current rate and the minimum payment due.
  • Rank your list from the highest rate to lowest.
  • Review your current household budget to determine how much you can put towards monthly debt repayment. If you are adding debt on a monthly basis, it means your discretionary income is actually negative. Start searching for items that you can reduce or eliminate from your budget. Keep in mind that your goal is to free up cash for debt reduction. While this will cause temporary discomfort, you’ll have freed up a tremendous amount of monthly cash flow when you get this debt repaid.
  • Starting with the highest interest rate debt, apply 100% of the total new discretionary income (or the extra amount you’ve budgeted) to this account until it is repaid in full. Continue to pay the minimum amounts on all other cards. This is critical- don’t spread your monthly discretionary income across all debts equally.
  • Once the highest interest card has been repaid in full, apply the original discretionary amount AND the amount from the paid off debt to the card that you ranked second one on your list. Repeat this pattern until each card has been paid in full.

And remember, this method can be used on ALL debt – not just credit cards.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s