Payoff Credit Card Debt Strategies

 

We will explore 4 payoff credit card debt strategies to get you on the path of building wealth and increase your brain power. Most have heard of two ways to pay off debt but we offer you two additional methods.

 

Turn this into a game and get motivated! Become focused and slay the dragon! Be intense and get on the winning path.

 

 

 

Credit Card debt levels

 

Credit card debt rises to a record $930 billion in the fourth quarter of 2019. That is an increase of $46 billion from the previous year. This is with an economy that is expanding yet debt is rising. The delinquency rate stands at 8.36%.

 

This is a club many Americans currently find themselves. If you are in this club you are certainly not alone.

 

 

The time has come to make some changes!   

Let’s get started on your journey. While we are targeting your credit card debt it will be wise to include all your debt. Get rid of it all and get on the road to accumulating wealth.

See you in the winner’s circle!

 

 

 

This will be a three part approach.

 

Step One

 

Get all of your debt pulled together. List them out who you make payments to, account number, amount owed, minimum balance due, due date and interest rate.

 

Include all your debt, I know we originally said we were going to get your credit cards paid off, but how would it feel to get them all paid off?  Become free of debt once and for all!

 

So you have credit card debt, perhaps auto loan(s), student loan debt, personal loans, may be a pay day loan. If you owe someone money then it is debt, get it listed.

 

Once you have all that information compiled the time of truth is upon us. Add them all up! Do it at least twice to make sure you have the right number. Is this what you expected? Is it less than you expected or more?

 

Either way it is what it is! Are you over the shock? Most folks have no idea how much they owe. Then they wonder why they are living pay check to pay check.

 

 

 

Step two

 

Are you over the shock? Now it is time to get into the details and get started attacking this debt. Do you have a budget? My guess is you do not or you would not be reading this. I have provided a link below to budget tools and how to prepare a budget, use them they will assist you in bringing this debt under control.

 

Prepare your budget, this may be the first time you actually have ever prepared one so do not go for perfection. There is no such thing. I have been doing budgets for most of my life and have never had a perfect one. They are a plan!

 

Yes, I said a plan and that is what you need. Remember plans can be adjusted and should be adjusted as new and exciting information become available. Without a plan you are just wondering, hopefully not in the dark.

 

When you do your budget make certain you include all your debt payments. How does that budget look? Do you have enough income to make all your payments? If not then we have more work to do. The goal is to have your income higher than all your payments. We will need extra to begin to pay down the debt.

 

Continue to fine tune the budget. Is there something you do not need in your budget. How about cable or some membership.

 

Here is a few links to help you fine tune your budget.

 

1. Budget Tricks and Tips Part I

 

2. Budget Tricks and Tips Part II

 

3. Budget Tricks and Tips Part III

 

 

 

Tighten down those expenses. Remember this is short term until you get you finances under control then as you eliminate your debt life will become easier.

 

How would it feel to get paid and not even know it because all your bills are paid and you have this large cash reserve about your emergency fund?

 

Or do you have an income issue? You need to make more money. Get a second job, start a side hustle do whatever it takes to get that debt paid off.

 

 

 

Step Three

 

This may be step three but this is perhaps the most important step. Get the scissors, get the credit cards and CUT THEM UP!  Yes, I said CUT THEM UP!

 

But… no buts. You said you wanted to get out of debt particularly credit card debt. So time to break clean.

 

But, what if I have an emergency how will I pay for it? Cash!

 

Yep cash! As quick as you can save up $1,000. This will be your short term emergency fund to get you off of credit cards. Once you have all your debts paid you will want to come back and create a three to six month emergency fund.

 

You can read about Emergency Funds here.

 

How do you get the money for an emergency fund, sell stuff, have a garage sale. Sell anything not nailed down. You want to have this in place quick, within the first month of your journey.

 

 

 

Four Strategies to eliminate credit card debt

 

Certainly there are two that everyone has heard about and then there are two alternatives that work equally as well. Chose one and focus on it. For focus is truly the secret to success in making this happen!

 

With your debt schedule in hand we are now going to construct your plan to become debt free. Say it, I am going to be debt free!

 

 

 

1. Debt Avalanche

 

Take you schedule and create a working plan. List your debt from the highest interest rate to the lowest. Begin to attack the first one on the list making extra principle payments to get it paid off as quickly as you can. Attack with a vengeance! Get it eliminated. Continue to make minimum payments on everything else. Then once the first one is paid off use whatever you were paying to attack the next debt. Continue doing this until you have paid off all your debt.

 

 

 

2. Debt Snow Ball 

Similar to the avalanche with one exception attack the smallest debt to the largest. Pay off the smallest then use that payment and pay off the next smallest until all have been paid. The last one will be the largest and the most difficult because it will take the longest and you have been at this for a while.

 

3. Debt largest payment to smallest

This method I found to be the most interesting in its concept. Begin with the highest payment adding extra getting it paid off. Place no importance on the amount of the debt or the interest rate. With it being the largest payment the theory is once paid off you now have this large payment plus some extra to attack the next largest payment. Your debts will quickly be paid and you will be on your way to financial success.

 

 

 

4. Debt the angry attack mode

This is one of the more interesting ones. It is perhaps the method I used. Pick the debt you hate the most. There is one you just despise. Zero in on it attack it and get it paid off. Rank each debt from the most hated to the least hated. If you are having trouble picking one just look them up on the internet and take a look at their headquarters. Pretty nice! Well you paid for it! Mad now? Get them out of your life!

 

Increase your brain power

In a recent article: A billionaire’s pledge to pay off these Morehouse students’ debt will affect more than their finances.  The article goes onto explain how billionaire Robert F. Smith made a recent gift to graduates to pay off their student debt.

 

In addition the article goes onto explain how eliminating debt clears the mind and gives one the ability to escape poverty or living pay check to pay check.

 

This gift is truly unique. The study also says that debt impairs psychological functioning and decision making.

 

 

 

In Conclusion

Get your debt paid off! Start here with your credit card debt, then move into the other debts you may have, such as student loans, car loans and then tackle the big one your mortgage!

 

It is possible, anything is possible with the right amount of focus and determination.

 

I have included various links below but there are many other relevant articles on my site, so feel to explore and grow your wealth.

 

May be you will someday payoff some ones student loans or help someone regain their financial stability.

 

How would that feel?

Our popular series Money Matters Wealth Tips. A daily series of about 1 minute in length that will accerlate your wealth building!

 

 

Other articles of interest:

10 Easy Steps to Creating a Budget that will put you on the path to Financial Independence

How to get out of Debt: Three popular Plans

 

So what are you waiting for? Need help getting started, Grab our FREE budget tools to help you along on this very important journey.

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