Credit Card Debt is a colossal
dilemma faced by many people in the world. It has become difficult for people
to manage debt successfully. Consumers,
in general, are lured by the credit card companies which offer attractive credit
limits. The promotional activities of the credit companies encourage the consumers
to develop a habit of spending now and pay later. Many people fall into this
trap and ultimately the credit card payments become the largest part of there
monthly expenses and their is no easy way of debt elimination.

Plan for Debt Elimination

Debt Elimination can be managed by careful planning and patience. Short term
and long term debt elimination goals can help to stay on debt elimination track
and provide motivation against credit card
spending.

A Simple Strategy that can provide Debt Elimination

Diverse strategies can be followed for debt elimination. You can choose any which suits your monthly income. We describe a step wise approach for debt elimination.

1. At first, write down all of the credit card balances in an ascending order.
2. The second step of this debt elimination strategy is to completely payoff the smallest debt in the list. In addition to the minimum monthly requirement of the lowest debt, pay as much as possible over and above the minimum.
   • If the minimum monthly payment is $25 dollars on the smallest debt, an additional amount of $20 could also be added in the monthly installment. This process should be carried out until the entire debt of the first credit card is paid off.
3. After the first debt is paid off, the minimum monthly installment of the first credit card is added into the minimum payment of the second credit card.
   • The minimum monthly payment on the first credit card was $25 and for the minimum monthly second credit card debt is $40, then the monthly payment of the second credit card would be $25+$40 = $65. By carrying out this step no additional money is required as minimum monthly payments are already allocated in the budget. Follow this credit card debt elimination strategy till the completion of all debts.

Word of Warning

In a debt elimination plan you must not only look for the smallest debt only but also for the maximum interest rate. In case the debt with maximum interest rate is not paid early the interests keeps on increasing and you pay a huge amount later. So try to pay the smallest debt with the maximum interest for debt elimination.

Tips for Reducing Credit Card Use

For debt elimination here are some healthy tips for a person to discontinue the use of credit cards.

1. Avoid carrying credit cards.
2. Use them in emergencies.
   • When large amount of money is required.
3. Write checks
   • Purchase is possible only if account has money.
4. Use debit cards

Living by your budget will help you pool all available cash for your credit card debt elimination.