4 Steps To Digging Your Way Out Of Credit Card Debt

Getting out of credit card debt might not be easy or on your list of priorities, but its important that it gets done. Being in debt affects your credit score which can affect your ability to buy things and get approved for loans. This article outlines the 4 steps you can take to dig yourself out of debt.

1. Assess the damage
When you decide to start on your path to getting out of credit card debt, you have to figure out exactly how much you owe. If you havent opened up your most recent credit card statements, now is the time to do it. If you cant find your most recent statements or want to get the most accurate amount due, call up your credit card companies and ask. Its important to know the exact numbers you owe. Yes, it will likely be shocking and overwhelming, but when you know the exact numbers, you can deal with reality. Knowing the real numbers will surely be a wakeup call.

2. Create a plan you can live with
Now that you know how much you owe on your credit cards you can begin to pay them off. Figure out what you can reasonably pay every month and divide them among your credit cards. If you can pay off one credit card that has a small amount on it, do that first. After that you can focus on the rest of the cards that will require more time. Try to get the highest interest cards paid off first, so that you avoid having to pay too much interest. If youre going to pay interest, its better to pay a lower amount.

3. Track your success
While youll know that youre paying down the credit card bills every month, it helps to see the progress in a visual form. Youll be thrilled to see the lower amount on your next statement, but in between you might want to see the progress to keep you motivated. You can create a wall chart so that you can see your progress on a daily basis. You will inspire yourself to continue paying down the debt.

4. Use cash more often
When youre paying off your credit card debt its a good idea to learn how to use cash instead of relying on the credit cards. When you use cash you know exactly how much you have to spend. By using cash you can learn how to budget. Learning to budget is a good skill to have weather you are using cash or using the credit cards. Credit cards are not free money. Its too easy to swipe them and buy anything you want, but the consequences come later when you need to pay for it all. Budgeting will help you figure out how to manage your money better.

You can pay off your credit card debt. Its just a matter of focusing and keeping your eye on the final prize of being debt free.

Sam Jones, the author, has been looking into bad credit credit cards at uSwitch.com to try and find the best deals he can in these tougher economic times.

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