So, you’ve decided it’s time to pay off your credit cards once and for all. That is terrific news! Good for you! However, there are many ways to go about this daunting task. You need to figure out a plan for exactly how you will accomplish your goal of becoming debt free and build up the determination it will take every day in order to get through this. Otherwise, you could end up right back where you started or in even more debt than ever before. Find the right combinations of strategies for you, and you will have that mountain of debt down to a molehill in no time.

Stop Charging

Before you do anything else, you need to put your credit cards away. More purchases on these cards will do nothing but keep you from your goals. Pay with a debit card or with cash while you get your debt under control, and try to get used to spending only the money you have instead of relying on a line of credit. This will be a good habit to have in the future so you don’t go back into debt.

Start with a budget

This is probably the most obvious thing you could do when you’re trying to get your debt under control. Figure out how much money you will need each month and do away with the things you simply want. Set a realistic budget and learn to stick with it while you pay off your credit card debt. When you are done, you can put the money that would normally go to your credit card payments into a savings account instead. You can save up this money to reach a new goal then, like going on a vacation or having enough money to retire sooner than you thought.

Repay more than your minimum payment

In your budget, you should set aside a specific amount to put towards your credit card payments, but you should always try to pay off more than you are required to pay each month. If you only make the minimum payments, you will end up paying much more in interest than necessary. The longer you take to pay, the more your creditor makes in interest, so find a way to pay off as much as you can every month.

Pay off high interest rate credit cards first

This strategy is probably the most common approach that is advised by financial experts. This is because you will be able to get rid of those high interest fees faster than if you tried to pay off all of your cards equally at the same time. Most people who use this strategy decide to make the minimum payment on the rest of their cards and focus on paying off the card with the highest annual percentage rate (APR). When they are done paying off that card, they move on to the card with the second highest APR. If you decide to use this strategy, boost your payments to a specific amount per month and stick to that amount. Don’t let yourself slip just because you are getting closer to your goal. This will only draw out the process.

Pay off your lowest balance first

This is another commonly used strategy because a lot of people paying off their credit cards want to simply “get it over with”. This gives you, what will seem like, a more achievable goal. When you finish paying off that card, you can move on to the next one and start a momentum that will keep you from getting discouraged. The sense of accomplishment you feel after paying off each card will be able to keep you going until you have paid off all of your debt completely.

This is a guest post from Lacey Cook, an author who writes guest posts on the topics of business, marketing, credit cards, and personal finance. Additionally, she works for a website that focuses on educating readers about the difference between bad credit and no credit.

Mastermind: Do you have credit card? Are you actively working to get out of debt?

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