Credit Card Debt

Millions of Americans live with credit card debt. For many, its a way of life. A necessary evil. Its just the way it is.

Not necessarily.

Credit cards can get you out of a bind when you don’t have any cash or the merchant will not accept checks. They are also extremely convenient. I would much rather swipe a piece of plastic than count up dollar bills at a restaurant.

However, there is a cost to this convenience. While you are swipe away, keep in mind that credit card companies are extremely successful. In fact, American Express posted an annual profit of $6.92 BILLION in 2018. That is quiet impressive, unless you compare American Express to VISA. VISA’s annual revenue for 2018 was $10.3 BILLION! Its no wonder why our mailboxes are full of pre-appoval letters from credit card companies that cant wait to extend us credit.

If you are living with credit card debt, use these proven strategies to overcome the debt machine and get your life back in order.

1. Calculate Cash Overflow

Whether its on a napkin, a spiral notebook, or on an accounting software like Quicken, create a monthly budget. List your monthly income and expenses but do not include liabilities (credit cards, car payments, student loans, etc). Subtract your income and expenses to calculate your monthly CASH OVERFLOW.

2. List Liabilities

Now that you know your monthly Cash Overflow, list your liabilities and the monthly debt payments associated with each account. Be sure to list each credit card, student loan, car payment, personal loan, etc. In a separate column write the total balance for each liability.

3. The “I Hate You” Card

You have all the necessary information before you and now its time to get started! Lets start by selecting the liability you want to payoff first. Its always easier to payoff the liability with the smallest balance but I recommend paying off the liability that you despise most. I call this the “I Hate You” Card.

So whether its your $400 VISA credit card or your husbands $1,000 Victoria Secrets card (that he opened for his ex-girlfriend) select one and PAY IT OFF as quickly as you can. Time is money. Get rid of the “I Hate You” card.

4. Pay It Off

Use your Cash Overflow to pay down that one debt. Each month throw as much cash towards that debt as possible until it is gone. Make sure to keep paying the minimum payments on all of your other debt. Once you pay this debt off, keep the momentum going and choose another debt to pay off.

As you conquer each debt, you will be tempted to go back to your old ways. BUT DONT! Keep going! Eliminate your debt!