If you're overwhelmed by nausea every time you even think of using your credit card, you've probably been on the "charge it" carousel just a little too long.
Time to get off.
But can you possibly climb out of that sizable debt hole you've dug for yourself over the past few years? You've racked up a $14,000 bill across three credit cards, and you only pay the minimum balance on each one. What's worse, the interest rates range from 16% to 18%, so you always pay more than you owe.
It's a demoralizing cycle that leaves you feeling like a hamster on a wheel, running as fast as you can but getting nowhere. Don't cry. There's good news. You can pay down your debt, even pay it off, if you're willing to put a little effort into it. After all, what's a little work when you're faced with years and years of irritating credit card payments?
- Figure out what you owe. To successfully dig yourself out of debt, you need to know how deep the hole is. Are you in it for $2,000 or $20,000?
- Keep track of what you charge. Every time you swipe. Sounds like a headache, but once you have a better idea of how much you're putting on the plastic, you might be inspired to cut back.
- Pay the balance in full. If you can do that, you'll avoid getting screwed by late fees, minimum payments and all the other sneaky ways that credit card companies and banks (remember, we're bailing them out!) have for convincing us that it's okay not to pay all we owe, all at once.
- Pay more than the monthly minimum. If you can't pay your balance in one shot, pay more than they're asking for. You'll reduce your debt more quickly, and you won't just be flushing your income down the high-interest-rate toilet.
- Apply for a new card. That's right. No-interest, low-interest, no-annual-fee cards are out there calling your name. Finding the right card means that you can move your debt across town, and save a ton of money in extra monthly charges. It does not mean that you can go wild at Nordstrom's semi-annual sale.
- Out of sight, out of mind. Choose your favorite credit card, and cut up the rest into itty-bitty pieces. Bury the chosen one in the backyard, stick it in the freezer, or ask your husband, boyfriend or best friend to hide it. Maybe under the poopy newspaper in the bottom of the birdcage.
- Use your debit card. It comes out of your checking account in real time. If your balance is on the brink, the little machine will tell you.
- Ask for help. If you're really up to your eyeballs in debt, get in touch with an organization that can help like Consumer Credit Counseling Services, the National Foundation for Credit Counseling or Credit.org.
Follow these sometimes painful steps, and you'll beat your debt senseless. But let's face it. The easiest no-hassle approach to credit-cardit is is to use cash. It's a radical idea: Buy only what you can afford. If you can't pay cash, you can't have it. Try it. You may not like it at first, but it will work.