Credit Card Debt Advice – Planned Pay Back

The best advice on credit card debt to follow begins with a plan. In fact, you should have a plan for your finances to guide your debt repayment, spending, saving and investing.
The dreaded “B” word – Budget or cash flow plan can reduce the time you are in debt and can save you potentially hundreds or even 1000′s of dollars.

To start, collect and list all of your outstanding debts. The latest statement such provide the current balance of the debt and also the interest rate. If your are not organized this may take some time, but the “pay off,” no pun intended, is worth the work.

Make sure you list all the debts – credit cards (each one separately) , mortgages, cars, boats, motorcycles, furniture, home equity loans or lines or credit, and even the money borrowed from your parents! Without a full picture of your debt, where you are at, how much is going for interest and what is required each month, you can never create a workable plan. Every dollar matters when you are getting out of debt or saving and investing for the future.

Some people argue over “good debt” and “bad debt” and make general assumptions that “good debt” would be considered something like a house which appreciates in value. However, any debt which you cannot afford and makes you a slave is “bad debt.” Tops of the “debt to eliminate” list:

• Credit Cards
• Consumer loans – e.g. Furniture
• Car Loans
• Student Loans
• Car Loans
• Home Equity loans
• Home Mortgage

Now that you have all the debts listed rank them from smallest to largest regardless of the interest rate.

Pay the minimum amounts on all debts except for the smallest debt and focus all your energy and extra money on paying off the smallest debt first.

It will take some sacrifices and changes of habits to move towards becoming debt free. But it is so very worth it!

The steps outlined above are simple and powerful – but take commitment! You DID NOT wander into debt and you cannot wander out!

If your debt overwhelms you, as credit card debt does to many, consider seeking debt consolidation help and begin changing your life!