The Road to Eliminate Credit Card Debt

Credit cards are dangerous little buggers. They come with a sort of implied promise of “free money” but in reality the money is not free and in fact it comes with a hefty price tag. That price tag is called interest and it is a thief. It steals from our future earnings, our future buying power, and our dreams. And it leaves us in a deep dark debt hole that some never climb out of.

So, if you look up and find you’re in that hole, you need to do something. But do you try to borrow money in some other way to pay off the credit card debt? Or do you look for a second job to earn more money for the payments? The answers to either of those questions could be yes but first you need to get at the root problem.

The Root Problem

In order to eliminate credit card debt you first have to turn off the source of that debt – namely, your credit card spending habits. If you’ve been building up a balance over time that means you’ve been spending more than you make. Now I realize that in this economy some folks have had to do that to try to keep their heads above water but that technique will only last for so long before the situation gets even worse. So, as much as you can, you’ve got to re-think your spending.

You’ll need to stop using the credit card. You can shred it if you want to or lock it away in a desk drawer but whatever you do you’ll need to stop using it. Now you may be thinking, “Wait a minute; there are certain purchases on this card that I pay off every month. They’re not part of the problem.” But I beg to differ. If your debt is increasing you’re not paying them off and even if you were staying even with your debt right now, you’re practicing the same habits that led you into debt in the first place. No you have to stop using the card or cards, or you’ll never climb out of the hole.

Track and Control

Once you’ve successfully eliminated the root cause of your credit card debt problem, you can take the next step. And that is to track your money. The best way to do that is to build some kind of budget. It doesn’t have to be elaborate, it just has to be something that you can actually use – even if it’s hand-written on a single sheet of loose-leaf paper. Keep track of all the money that comes in and all the money that goes out. Categorize it as best you can and be prepared to be amazed at what the numbers tell you after just a couple months.

You’ll find leaks in your bank account that you didn’t know existed. Things like cleaning costs you didn’t know were so high. You’ll find entertainment costs you didn’t know existed. In short, you’ll develop a whole new appreciation for where your money goes and the decisions you’ve been making (or not making at all) in the process. Once you’ve got a good feel for your money flows it’s time to take the toughest step yet.

Make the Hard Decisions

You’re going to have to change things so that you can keep more money at the end of each month than you spend. That means you’re going to have to give some things up and that won’t be easy. It never is.

Maybe you’ll have to begin washing and pressing your shirts instead of sending them to the cleaners. Maybe you’ll have to give up going out to restaurants every week in favor of cooking more family meals. Maybe you’ll have to stop going to the movies and start reading more books from the library. But the decisions might even be larger and harder.

You might have to consider sending your kids to public school instead of the private one they now go to. You might have to drive your car for a few extra years instead of getting that new one you’ve been planning on. You might even have to find a second job to earn enough to make some headway in your debt. None of these choices are easy ones but they’re necessary ones if you want to be debt free.

Last Word

Eliminating credit card debt is more like a cross-country race than a 100 yard dash. To be successful, you’ll need to keep the faith and take it one day at a time. You’ll need to cultivate the ability to celebrate the little successes that you can achieve each day and forget about how fast you’re making progress to your ultimate goal. It’s not an easy road to travel, but it’s worthwhile.