8 Money Moves That Will Eliminate Your Credit Card Debt

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If you’re feeling the burden of credit card debt, don’t worry, you’re not alone. Not only are you not alone, but there is hope. Debt is something I want to focus on a little more around here since there are plenty of people that can’t even begin to consider financial independence because they’re still dealing with debt, and, in particular, credit card debt. So if you’re looking for some quick and easy actionable tips to eliminate your credit card debt, keep reading! I want you to know that I have been there. There have been many times throughout my life that I cycled through credit card debt. I would run up my cards, panic, and pay it off all. And when it was all paid off, I would do it all over again. Eventually, I realized I needed to get my financial act together once and for all if I ever wanted a shot at building real wealth.

If this sounds familiar and you’re ready to kick your credit card debt to the curb like I did, check out these 10 actionable tips that’ll have you debt free for good.

1. Stop Digging

The VERY first thing you need to do to get rid of your credit card debt is to stop digging. As in, stop digging your debt hole deeper. It doesn’t make any sense to start funneling large chunks of money toward debt repayment if you’re just going to turn around when you see your balances dip and charge it right back up.

So, stop using your cards. If your willpower is that of a 3-year-old in a candy store, you might need to go to extreme measures. Ask a trusted family member or friend to hold your cards, freeze them (literally, in a tub of water in the freezer), or cut them up.

This first step was a powerful one for me. By committing to stop creating more debt, I felt as if I had finally taken control of it, even if I hadn’t made a single payment toward elimination.

Oh, I also want to mention that you can cancel cards that still carry balances. Obviously, if you do this you won’t be able to continue to use the cards, but you will still be responsible for the remaining balance.

2. Make A List Of Your Debt

Before you can start attacking your debt with fervor, you need to have a clear picture of how much you owe and who you owe it to. To do this, you need a list. Make a list of all of the credit cards you own with balances.

Then, write down balances and interest rates. It doesn’t matter what you use to collect this information. It can be as simple as a pen and paper – just get the information in front of your face so you can see your debt situation and make some decisions.

After I did this, I remember being shocked at how much I actually owed compared to how much I thought I owed. Balances have a way of creeping up – even if you’re just spending $50 here and $20 there.

Just so you know you’re not alone, check out some of the stupid stuff I bought on credit to create my debt:

• Restaurant meals
• Clothes and shoes I didn’t need
• Vacations
• Books – Yes. I charged books.
• Haircuts and color
• Makeup
• Art supplies – I’m not even kidding here
• …and on, and on, and on

3. Check Your Credit Report And FICO Score

When it comes to debt and your hard-earned money, you might want to make sure your credit report has the same debts listed as you do. If not, you could be dealing with some errors or even identity theft, both of which can negatively impact your FICO score.

Since errors on a credit report do happen and oftentimes go unnoticed until the unfortunate recipient needs to use their FICO score to make a big purchase (think: a car or home), I highly recommend using a trusted site like Experian to look over your credit report.

This isn’t a necessary step in paying off your debt, but it is a part of being financially responsible and a good way of keeping a pulse on your credit report and FICO score.

Fortunately, I haven’t been the target of identity theft or any errors yet, but I do enjoy having the information. #knowledgeispower

4. Decide On A Debt Repayment Strategy

With all of your information in hand, you’re ready to decide how you want to eliminate your credit card debt. There are two major debt repayment strategies that will eventually get you to the same place – Debt Free. These two strategies are the Debt Snowball and the Debt Avalanche.

If you use the Debt Snowball, you’ll be paying off the card with the lowest balance first. When that debt has been eliminated, you’ll be using the money you were paying on that card and applying it to the next card with the lowest balance.  Although you’ll pay more in interest with this method, it’s great for motivation and is the method I used in the past.

If you decide to use the Debt Avalanche method, you’ll be paying off the card with the highest interest rate first. After that card is paid off, you’ll be using the money you were paying on that card and applying it to the next card with the highest interest rate. Hands down, this is the method you’ll want to use if you want to pay as little in interest as possible during your debt-free journey.

5. Widen The Gap Between Your Income And Expenses

This is a no-brainer but something I absolutely need to mention. In order to pay off your credit cards in the fastest time possible, you’re going to want to squeeze more money out of your monthly budget.

You can do this by increasing the gap between the money that’s coming in and the money that’s going out each month. In order to widen the gap, you’re going to need to either increase your income, decrease your expenses, or, if you’re laser-focused on eliminating your debt, do both.

Ways To Increase Your Income:

• Ask for a raise
• Take a different job at your company
• Get a promotion
• Change companies
• Start a side hustle

Ways To Decrease Your Expenses:

• Cut back or eliminate cable
• Reduce your mobile data plan
• Make more meals at home
• Cut back on utility use
• Look for less expensive insurance plans

6. Set Up A Reward System

It’s important to stay motivated during your debt repayment journey. Setting up a reward system doesn’t need to be complicated. It can be as easy as a meal out with friends after you complete a milestone.

This is your journey which means your reward system should suit your personality and motivational requirements. Maybe you’re okay with waiting until a card is paid in full before giving yourself a reward, maybe your balances are on the higher side and that won’t work for you. In that case, maybe rewarding yourself for every $2,000 paid is the right pace for you.

For me, I went with a reward for each card balance that I eliminated. And I’m sure it’s no surprise to anyone who is a regular reader that I chose to go out to eat, which is kind of funny since a sizable portion of my credit card debt was incurred in restaurants. Oh, the irony.

There is no right or wrong way to implement a reward system. As long as you’re staying on track and watching your balances disappear, you deserve to be rewarded. Go for it.

Other articles you might enjoy:

• How To Dig Your Way Out Of Debt When You Feel Hopeless
• How We Slayed The Debt Monster
• Shifting To A Frugal Mindset Has Given Us Options. Tons Of Options.
• We’re Reaching Financial Independence Without Bikes or Baked Beans
• 11 Easy Money Lessons You Need To Learn To Be Rich
• 5 Things Every Frugal Person Should Spend Money On
• Debt Relief Programs For Every Type Of Debt

7. Track Your Net Worth

This might seem odd, but one of the best things you can do to stay motivated and make sure you never go back into credit card debt is to track your net worth.

It is hands down the best thing we ever did for our overall financial health. We absolutely love the simple, secure, and free money management tool, Personal Capital. It’s easy to use, quick to set up, and free. Did I mention free? We like free. 🙂 I say “we” here because I didn’t start tracking my net worth until after I married Mr. MMM.

With everything Personal Capital has to offer, it’s hard not to love it. It doesn’t just offer net worth tracking. There are also tools for budgeting, retirement planning, asset allocation, and much more.

So if you’re ready to get serious about, not only your debt but the future of your finances, I highly recommend you give Personal Capital a try.

8. Stay The Course To Eliminate Your Credit Card Debt

The bottom line is, if you stay the course your debts will be eliminated and you will become debt free. There is no other outcome.

So before you go to bed again with the burden of crushing credit card debt hanging over your head, make a resolution to stop digging.

Remember what they say, the first step is always the hardest.

Have you conquered credit card debt once and for all? How did you do it?