by Gordon Hamilton

Created on: May 02, 2009   Last Updated: May 26, 2011

The first positive step to eliminating credit card debt is to stop using your credit cards. Before you can even contemplate eliminating the debt, you must ensure that the level of debt is not going to increase in the interim, other than by what will likely be the inevitable interest charges.

When you have taken this first step and are getting down to the dynamics of eliminating your credit card debt, there are two general ways in which you can proceed. The first option is to consider eliminating the credit card debt in one fell swoop by taking out a consolidation loan. This is a loan which is likely to be at a significantly lower rate of interest than you will be paying on your credit cards(s) and the proceeds of which will clear the outstanding balance on the cards. As you will be paying what may well be substantially lower levels of interest on this loan, you will in effect be paying back more of the outstanding debt each month and will therefore be able to eliminate it altogether in a more timely fashion.

If you decide, for whatever reason, however, to simply eliminate your credit card debt by paying more to the cards each month, the first step you have to take is to look at in which other areas of your finances you can reduce costs. This has to be a ruthless exercise, considering everything from your grocery bills, to how much you spend on entertainment and social events, to perhaps how much you are contributing to savings plans. Anywhere and everywhere you can make cost reductions in order to channel more funds towards eliminating the debt on your credit cards will be ultimately beneficial.

If you have a number of credit cards, it makes sense to try to eliminate the debt on them one at a time. You should look at the one which is charging you the highest rate of interest and target all your extra funds towards eliminating the debt on this card, while of course continuing to make the minimum monthly repayments to your other credit cards. You then proceed to target the card which is charging the next highest rate of interest and so on until the procedure is complete.

It is vital that when you eliminate your credit card debt, you ensure that you do not simply proceed to let it accumulate again. This means that you should sit down and produce a sensible monthly budget, one which may involve using your credit cards but which ensures that you do so in a more sensible and cost effective fashion. Only in this way can you stop the credit card debt which you have struggled to eliminate building up again in similar fashion and the same debt problem recurring.

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