Credit card debt can feel overwhelming to get out of. It takes time and a plan, but you can do it! Read these simple steps to get out of debt fast.

Sourced from: www.freeupfinance.com

Are you ready to break your addiction to debt? The first step is to acknowledge that you’re ready. Then it’s time to take control of your finances, rid yourself of worry and stress, and live a debt-free life.

Credit cards are big business in the United States.  Approximately 40-45% of all households carry some sort of credit card debt, with an average balance of $9,000-$10,000.

When you’ve grown used to carrying a credit card balance, finding your way out of debt can be overwhelming. It’s like an addiction. The good news is there are many paths and strategies to get yourself debt-free. Here are a few simple steps:

1. Know What You Owe:
Ask yourself these questions: What are the interest rates on my cards? What are the balances on the cards? What is my total balance owed?  Write these down as a reminder for you each time you pay your monthly bill. You’ll never reach your target goal unless you know how much you owe and where you currently stand.

2. Understand Your Budget:

Your budget is your total net monthly income minus your expenses. To pay down your debt, you need to apply any or all the extra money you have each month, and that is the reason you need to know your budget.

3. Improve Your Interest Rates:
When it comes to debt, credit card debt is often the most dangerous and overwhelming because the interest rates are typically very high. The quickest way for you to lower your credit card bill and balance is to negotiate a lower interest rate on each card. Reducing your interest rate by even a percentage or two can save you hundreds of dollars or more in interest.

4. Choose a Payoff Strategy
The folks at FreeUpFinance.com have compiled a good lis of debt payoff strategies.

• Debt Avalanche Strategy – This simply means pay off your highest interest debt first. So take any extra money each month from your budget (after paying minimum debt payments) and use the extra money to make larger payments (beyond minimums) on your highest interest loan.
• Debt Snowball Strategy – In this strategy, pay off your smallest debt balances first. Meaning take any extra cash each month and apply larger payments to the smallest balance. The advantage of this strategy is the gratification of closing out balances faster, giving you more motivation to continue paying your debt off. Additionally there can be advantages to your credit score by reducing your credit utilization on each card.
• Make a Balance Transfer – Along with using one of these payoff strategies, you may be able to transfer a balance from a higher interest card to a lower interest card. Reducing the rate on your highest interest debt allows you to instantly focus on the next highest interest account. This results in spending less money and lowering the total amount paid on interest over time.
• Consolidate Debt with a Personal Loan – Personal loans tend to have a much lower interest rate if you qualify, so you end up paying less overall. You also have the convenience of only making one payment a month, instead of multiple payments on cards. We don’t generally recommend opening up new credit accounts, but if you use it responsibly, make your payments and don’t add more to the loan, and don’t use your credit cards while paying off the loan, it can be beneficial to your financial future.

5. Change Your Payment Method or Frequency
Making only the minimum monthly payment can take years to pay off. Know what your minimum payment is and double it each month. Doubling your payment will cut years off your debt, and have a huge impact on the amount you will save in interest.

If you can’t afford to double your payment, try splitting your payment in half and pay twice each month. You’ll pay the same amount you planned each month, but you’ll still save money and pay your balance off faster.

6. Adjust Your Lifestyle and Stop Using Your Credit Cards:
It is imperative to stop using your credit cards. You can’t pay off your debt if you are continually adding more to it. There’s no need to cancel your accounts, as this can negatively affect your credit scores. Place your cards somewhere safe and don’t carry them on you. Resist the urge to use them and only spend from what you have currently available in your bank account.