New credit card rules went into effect in 2010, requiring that your monthly credit card statement include important information about how long it will take you to get out of debt if you only pay the minimum payment and what payment you need to make to rid yourself of the balance in three years. This information is included on your statement for your benefit; use it to your advantage to help you put together an actionable “get out of debt” plan for the next three years.
Gather Credit Card Statements
The first step in getting out of debt is to face the debt. Gather each of your credit card statements. Identify the monthly payment amount you need to make on each credit card to pay it off in three years and write it down. Add up each of the payments to get the total figure you have to deal with on a monthly basis to finally get rid of your credit card debt for good.
[Free Resource: Check your free credit report and score]Commit to Paying It
The second step in creating your debt payoff plan is coming to terms with paying off your credit card debt. You have to make a commitment to yourself, to your family and to your personal financial situation to get your credit cards under control, and get the balances paid off sooner rather than later. Another commitment you have to make is to stop adding to your credit card balances. Stop making purchases with your credit cards that you can’t pay off each month on top of the monthly payments you have to make to stick to your payoff plan.
Free up Cash
This is the hard part. If you don’t have enough money to make the monthly payments necessary to stick with your three-year debt-free plan, it’s time to take action. There are a lot of ways to cut regular expenses and save money on everyday items. You may need to give up luxuries, but remember, it’s only temporary. If you’ve already made sacrifices and cut on smaller everyday items, consider what you can do with your largest expense – your home loan. If you have equity in your home and have been careful about keeping your credit score in tact, you may be able to refinance and tap the equity in your home to pay off your high-interest credit card debt.
Make it Automatic
Finally, put your payoff plan on autopilot. Set it up with your bank so that your credit card bills are paid each month in the amount you’ve calculated you need to pay to be debt-free in three years. Your credit card issuers may also offer the option to deduct the monthly payment automatically from your checking or savings account. Use one of these two options in setting the three-year monthly payments for each card and then be done with it once and for all.
Use the new credit card law to your advantage. The information available to you on your monthly credit card statements is there to help you and allows you to create your own credit card payoff plan. Then put the steps in place to implement the payoff plan. A solid plan is one of the best ways to finally regain control of your personal finances and to once and for all get out from under your credit card debt.
If you have substantial debt or many credit cards with balances, consider enlisting the help of an expert. A Debt Payoff Planner like the one offered at Quizzle.com will put together an actionable plan just for you to help you become debt-free faster and save potentially thousands of dollars in interest.
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