Finance Roll

If you are trying to learn how to get out of credit card debt then you are no different then millions of other people who find themselves in the same financial straights as you. Unfortunately the only way you can take back control of your finances is to deal with this debt head on. But if you stop and think about how much better things would be without that debt you will see why this needs all your attention.

The first thing you will need to do is find out just how much credit card debt you actually have. If you are like most people facing this problem you have probably looked at your monthly statements as they come in and then tried to pay the minimum balance which isn't making much of a dent in those balances.

Step one is to gather up all your most current statements for this month and make a quick credit card debt spreadsheet. It doesn't need to be a fancy spreadsheet, just use a pencils and a piece of paper. On the left hand side of your paper write a column of all the names of the credit cards you have. In subsequent columns write down the balance owed for each, the monthly minimum payment, the monthly interest paid, and the interest rate being paid. Now add up the balance column, the minimum payment column, and the interest paid column and write down each number at the bottom. This will show you exactly how much you owe, how much you are sending out each month in payments, and how much you are paying these companies in interest.

These totals may be scary to look at but it's something that needs to be done if you are to ever get out of the financial mess these credit cards have caused. Think about what you could do with that money if it wasn't just walking out your door every month. That interest you are paying could be interest being paid to you if it was being invested in some sort of saving or retirement account. It should make you mad and give you the motivation to do something about it.

The second step to paying off your high credit card balances is coming up with a plan that works. There is several ways to do this but if seeing quick results and staying motivated is on your list of wants then the "Debt Snowball" is the method for you.

The term "Debt Snowball" was first coined by Dave Ramsey and is a process by which you pay off your smallest debts first as you work your way up the ladder to your targets debts. To get started use your debt spreadsheet as a reference and on another piece of paper rearrange your debts listing them from the top (smallest) to the bottom (largest). While paying the minimums on all your other cards send whatever extra money your budget can allow to that smallest balance at the top of you list. Once that's paid off roll that minimum payment and any extra money into the next smallest debt and keep working your way down the list. By the time you get to the bottom you should be able to throw a rather large chunk of money at that last debt and pay it off in short order.

The third step to becoming debt free is finding extra money to throw at those bills. You need to be in attack mode when it comes to your debts. Get a part time job delivering pizza or newspapers, have a garage sale and get rid of all that stuff that's been collecting dust around your house, or sale that stuff on eBay. Do whatever it takes to bring in extra cash and watch that debt disappear that much faster. Look at your spreadsheet and picture what an extra $1,000 a month would do.

There is one last thing you have to do if you want to know how to get out of credit card debt; you have to stick with your plan. When you first start out it will take some time to get some momentum going. There will be setbacks that you will have to work through but if you keep your eye on that debt free prize your hard work and perseverance will pay off.