Getting rid of credit card debt is both rewarding and challenging at the same time. I know from experience that getting into debt is much easier than getting out. Most of the debt I’ve put on credit cards has been a result of home improvements. We bought a fixer upper home and decided that using credit cards would be the easiest way to finance the needed improvements. We are getting a handle on our credit card debt but it feels like an uphill battle all the way.

If you have never called your credit card companies you might give it a try. If you have been a good customer with no late payments you’ll have some negotiating power when you call. If you haven’t maxed out your credit card you will get better results as well. When you call tell your credit card company inform them that you’ve been getting offers in the mail with better interest rates. You can also mention that you’re thinking about using a balance transfer card to lower your payments. Ask them what they can do for you in terms of lowering your rate and increasing your credit limit. Lowering your interest rate can help your payback time considerably. A higher credit limit that is not in use will improve your credit score for the next time you call.

Setting up a payoff schedule that works with your budget will have your debts paid off in no time. Don’t shoot for the moon when you set this up. Instead, try something that is doable. The $100 used in this example can change depending on your debt. You want to avoid making the ‘minimum payment’ on each of your cards. Try to be the most aggressive with the highest interest card on the top of the list.

1st phase of payments
A – 14% account – $100
B – 12% account – $100
C – 11% account – $100
D – 9% account – $100
E – 8% account – $100

First order your debts from the highest interest to the lowest. Set up a flat (or consistant) payment you can make on each account every month.

2nd phase of payments
A – Paid off! – Now use this $100 for account B
B – $200
C – $100
D – $100
E – $100

After a set amount of time ‘Account A’ (the first account) will be paid off. Instead of taking that $100 back use it on Account B. You’ve already budgeted for it and it will speed up you payment schedule.

3rd phase of payments
A – Paid off!
B – Paid off!
C – $300
D – $100
E – $100

When you get to Account C you will be putting $300 towards it each month. Continue ‘stacking up’ your entire debt payments on each account until you don’t have any more credit card debt.

Switching to cash is the best way to avoid any credit card traps into the future. It forces you to start saving for large purchases and frees up a lot of wasted money you’d pay in interest. At 22% you’d spend $2,200 a year in interest payments just maintaining $10,000 of debt. Can you image what you could do with an extra $2,200 every year? Switching to cash and paying off your credit cards will help you put this money back in your pocket.

I don’t believe in freezing your cards. If you’ve had real problems with credit cards shred ’em! Paying off credit cards is very rewarding; psychologically and monetarily.