10 Steps to Achieve a Zero Credit Card Balance
If you are carrying the burden of credit card debt and are desperate to find a solution to help you pay it off quickly, don’t despair. It is possible to become debt free quickly.
It will take some planning, determination and work but if you really want and need to clear that debt then here is an insanely specific plan of action to follow:
1. Know What You Owe
You may have been too scared to check the total extent of your debt. However it is absolutely essential to know how much you owe and to whom. You also need to know what % interest you are paying on each of your debts.
Check all of your statements and write a list. Include the total debt, the creditor, the monthly repayment amount and the interest rate being paid.
Understanding the full picture will help you to formulate your plan but is also an important first step in taking responsibility for your debt and taking action to obliterate it.
Do not be surprised if the total of your debt shocks you. Let’s face it, if you are in debt it is likely that you have not been paying full attention to your finances. You may also feel a little ashamed at what you find, but try not to feel too bad.
The most important thing is that you are now doing something about your credit card debt and by following a plan you can change the situation and become debt free.
2. Move to 0% Interest Rate Offers
If you have credit cards that are not maxed out and which are offering 0% interest deals you can look at moving your debt so that all of your monthly payments are going towards clearing the debt down and not wasted on interest payments.
This is often called “credit card pimping”.
Check out the cost of moving your balance as there will usually be a one off charge to do this. It will still be the right thing to do if this payment is lower than the savings you will make on interest payments. You will of course be able to work this out by working out how long you are likely to have an outstanding balance and multiplying the interest payments by the number of months that are likely to be remaining.
3. Ask for Better Deals
For the credit card debts that cannot be moved to a 0% interest offer, I recommend that you call each and every creditor and explain that you would like a reduction the rate of interest that you are currently paying.
You may be surprised, but this often works and helps to lower the amount of interest that you pay each month. This will help you pay your debt off faster.
4. Save a Small Emergency Fund
It is essential to have a small amount of money aside, just in case something should happen. I recommend that you set this amount set $1000. This will cover any unexpected expenses or issues and ensure that you have a small something to fall back on.
Do this first, before you may any additional payments over and above the minimum payments on your credit cards.
5. Prioritise Your Payments
Once you have your emergency fund in place, I recommend that you then follow the “snowball approach”. This is where you pay minimum payments on all except your debt with the highest interest rate.
Plough all of your spare money into paying off the debt with the highest interest rate first.
Once you have paid that debt in full, divert all of your extra cash to the debt with the next highest interest rate.
As you work through your debts in this way you will have a higher and higher amount to put towards the debt that you are focussing on.
This method allows you to both gain a great momentum in getting the debt paid but it will also help to get your debt paid as quickly as possible as you are paying the most expensive debt for the least amount of time possible.
6. Stop Adding To Your Debt
It goes without saying that whilst you are focussing on clearing credit card debt it is not wise to continue using them and adding to that debt.
Cut all of your credit cards up except for one that you may need for emergencies. Don’t carry that card around with you, leave it at home in a safe place where you can get it if you need it, but not easily and immediately to stop you making impulse purchases.
You could consider freezing your credit card into a block of ice so that you can get it if required but you cannot access it immediately.
7. Limit Your Spending
While you are in debt it is important that you are paying off that debt and not making it larger. In order to get out of debt as quickly as possible you also want to avoid slowing down the process. Therefore spend money only on essentials, i.e. your “needs” and leave spending on luxuries and “wants” until you are in a better financial situation.
8. Join an Online Support Group
The process of paying back debt will involve a change in your spending habits for a period of time and it can be extremely challenging to stay on track.
I highly recommend that you find an online forum, community or support group where you can discuss your progress with likeminded people who maybe facing similar challenges or who have already achieved their goals of being debt free and can offer you good advice.
Having a support network in place will provide a good level of support and motivation. By sharing your plans it deepens your commitment and somehow makes you feel accountable.
9. Earn More!
A good way to pay off your credit card debt quickly is to earn a good wedge of extra money each month. Although many people believe that this is not possible, there is no reason why you cannot do this even if you already have a day job and other responsibilities.
I have written another blog post specifically on the subject of earning extra money to help clear debt, but the best method of earning I have found to earn a decent additional income is the affiliate marketing method. This is how I make money in my own business each day. It is easy to follow and is very effective.
The best thing is that you can work at times that suit you around your existing commitments. Unlike other means of earning online (such as completing surveys) this also provides the opportunity to earn hundreds and thousands of dollars each month rather than just a few dollars here and there.
10. Change Your Mindset – Think Rich
Once you are out of debt, the aim should not only to be to stay out of debt but to work towards accumulating savings and wealth for your future and your family’s future. This change requires both a change in mindset and some education.
I frequently listen to audios and read plenty of books and blogs on this subjects of earning passive income and managing finances, but I would hugely recommend that you get the downloadable videos training called RichDad Summit by Robert Kiyusaki.
Robert Kiyusaki is the author of the world renowned book called Rich Dad Poor Dad. The principles that Robert teaches have enabled many people to become financially free.
Robert is so committed to helping people that he charges only $1 for 2 days of downloadable video training.
I recommend that you take action to access this training now. The extra income will firstly help you to clear your debt and then enable you to focus on accumulating. I am also not sure how long this will be offered for just $1 so very worthwhile getting it whilst it is still at this rock bottom price as I estimate that it is actually work at least $1000 dollars.
The RichDad Summit will also provide you with a huge amount of motivation to push through the situation you are currently in.
Get the training for just $1 here>>=== Rich Dad Summit
A Final Word
The most important thing to know is that to succeed at clearing your debt you must take action. Not just take action but take MASSIVE ACTION!
Take action today to follow the above steps and watch your debts melt away.
I guarantee that if you do, you will look back in a few months time and see that you are in a totally different place – life will be less stressful and options will have opened up to you. You may even find that your relationships improve as you become a more positive, responsible and liquid person!
I wish you all the best in your quest to clear your credit card debt – you really can do it!