5 Steps to Help Eliminate Credit Card Debt

If there is one thing most people have in common, it's debt. In this day and age it is very easy to get a credit card, and it's even easier getting into credit card debt. The aim of this article is to give you some tips to help eliminate credit card debt. 5 simple steps are described below. If you take action and follow these steps you will be well on your way to eliminate credit card debt.

1. Calculate how much debt you are in

So how do we get started to eliminate credit card debt. Well firstly, you need to know where you currently are. Most people don't actually realise how much debt they are in. Firstly, examine how many credit cards you have and how much you owe on each one. Also you need to look at the interest you are paying on each card. Now calculate the total amount of debt you are in and how much you are paying in interest. You will end up with a figure - a goal to set yourself. For example, if you calculate you're in debt of $10,000, your goal will be to eliminate credit card debt of $10,000.

2. Consolidate your existing credit card debt into one managebale payment

What you ideally want to do now is to consolidate your credit cards and end up with only one low monthly payment. The key here is in the interest rate. You want the lowest one you can possibly find. Maybe this will involve a loan or maybe it will involve acquiring a new credit card and doing a balance transfer. There are many credit card companies that offer a 0% interest rate on balance transfers for 6-12 months. If you can find one of these deals it would be an ideal starting point.  The last thing you want is another high percentage rate that bleeds you dry month after month. No one wants to lose all that additional cash to nothing. You want to pay off your debt and be done.

3.  Keep a Spending Diary

This is something very simple, yet very powerful. All you need to do is to just do it!  Start keeping a spending diary. Doing this will give you an idea of how much money you are spending and what things you are spending your money on. It is best to keep a diary for at least one month, preferably longer. After a month, you will have a better idea on what areas you can start saving some money. Maybe you find that you spend an excessive amount on clothes, at the coffee shop, or socialising with friends. The purpose of this exercise is to help you analyse your spending, highlight the things you can cut back on, and finally start to eliminate your credit card debt with the extra money you find out of this exercise.

4. Use at least 5-10% of your monthly earnings to pay off your debt

The next stage is to focus to eliminate credit card debt. Every month, pay off as much as you can, ideally 5-10% of the total amount. If you cannot afford that, then pay off as much as you can afford- as long as it is greater than your minimum monthly payment. With your new found knowledge from the previous exercise you should have more money to help eliminate credit card debt more quickly.

5. After your debt has been paid off, continue to save at least 10% of your earnings every month into a savings account

If you follow the previous 5 steps, you will get to the stage where you completely eliminate credit card debt. Congratulations. Its time to celebrate! But its also time to decide never to get into debt again! You should already be in the habit of paying off a monthly sum of money. The only difference now is that you can create a savings account and pay monthly into this. It is good practice to save at least 10% of what you earn into a savings account. These savings can come in handy in the future.

So there you have it, four simple steps to help eliminate your credit card debt. If you follow these steps I am positive that you will eliminate credit card debt once and for all. I wish you all the best.