Eliminate Credit Card Debt

Credit card and other personal debt is an unfortunate fact of American life. Our consumer society bombards us with buy-it-now messages through every conceivable advertising medium. The average American household carries over $9,000 in revolving debt. This is an alarming statistic that should get everyone's attention. The only wise course of action is to eliminate credit card debt and to begin now. There are basically five tried and true steps to getting debt free. Follow this simple guide on how to eliminate credit card debt and you can take charge of your financial future.

Step 1. To eliminate credit card debt stop adding to the problem. If you are thousands of dollars in debt and continue spending more on your credit cards than you make things are obviously not moving in the right direction and only getting worse. You must stop using your credit card to borrow from tomorrow what you want today.

Step 2. Set up a budget. This can be a difficult exercise for many of us since easy access to credit cards has been made available for so long. The interesting part of this process is that it spotlights how much wasteful and unnecessary spending we engage in that can be curtailed without undue pain. Non-discretionary items such as mortgage/rent, utilities, food and insurance take up the lion's share of most household budgets but it's important to allow yourself some mad money to play with if possible every month. The only difference is that instead of giving yourself carte blanch to get anything you want with a credit card you have set aside a fixed amount of cash to allocate toward discretionary items.

Step 3. Use cash rather than credit cards when possible. There is a reason that casinos give you chips to spend instead or requiring cash – it's because people don't attach the same value to non-cash substitutes and will spend and bet more freely. And it's the same with credit cards. National averages show people spend 112% more when using a credit card vs. cash for purchases. It's no wonder that most merchants accept and encourage the use of credit cards. So, next time you buy pair of new shoes or the latest CD try laying out the cash and feel the burn rather than quickly signing a credit card charge slip. It's amazing how it makes you think twice about those impulse purchases.

Step 4. Another thing to do to eliminate credit card debt is to get a better rate on your existing credit card. If you have thousands in personal debt it can really help the monthly cash flow if you are able to transfer those balances onto a low interest or 0% APR credit card. Your credit rating will generally determine whether you can be eligible for the lowest rate offers but it could definitely be worth the effort.

Step 5. Apply your new found cash flow to retiring that debt. Living within your income, establishing a budget, paying cash (and spending less) along with better interest rate terms on your credit card debt should save you hundreds each month. The final step involves applying these funds toward your outstanding credit card balances to help eliminate your credit card debt.

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