It’s Time to Pay off those credit cards!

It’s time to get a brand new attitude on credit card spending, and you can start by creating a pay-off plan!  Don’t think that you are the only one out there struggling with credit card debt.  There are a lot of people who are in this same boat.  You just need to know how to get started.

First, assess the damages.  How much do you have in credit card debt?  Add up all the cards that you have and get a good assessment of where you are at.  Also take a look at your overall debt-to-income ratio.  This will help you give a good idea of where you’re money is going and where you can make adjustments.

Second, start thinking of a payment plan.  This may include contacting your creditors.  Some of them may work with you to close the account and set up a reasonable payment plan or at least lower your interest rates.  The point is, you need to call and ask what they can do.  The worst thing they can do is tell you no.  Your payment plan should be consistent and realistic.  Make sure it’s something that you can stick to.

When setting up your plan, also look at your interest rates and available balances.  It could be possible for you to consolidate some higher interest cards on to a lower interest card that you already have.  The key is to stop using those cards you’ve transferred the balance off of.  Transferring the balance doesn’t give you free reign to rack the charges right back up!

Third, get rid of those cards!  You can cut them up, hide them, ask someone else to hide them, or freeze them in a block of ice.  That last one may sound funny, but if you really want to use it, you’ll need to wait for it to unfreeze, and by then your urge to splurge may have passed.  It’s reasonable to keep one card as an emergency card, but the others have got to go.  My advice is to keep the oldest card.  The longer you have a credit card in good standing on your credit report, the better it can impact your credit report.  It helps establish your credit history.

Fourth, put yourself on a budget.  Don’t put yourself in self-imposed debtor’s prison, but establish a reasonable budget.  Allow yourself to splurge every once in a while, something small to celebrate each balance paid off!

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