Beat that Credit Card Debt!! (With a big stick...)

Jul 4, 2006

The Bottom Line You can do it if you really want... But you must try... Try and try... Try and tryyyyyyyyyyyyyyyyyyyyyyyy... You'll succeed at last!

There is in fact a 100% fail-safe way to avoid credit card debt. It’s simple, easy, and anyone can do it. Of course the credit card companies don’t want you to know about it.

Are you ready?

Here it comes…

Don’t have a credit card.

However, since you’re reading this, I’m taking it that you already have a credit card. It probably doesn’t take too much of a leap of the imagination to conclude that you probably don’t find it easy to pay off the full amount on your card off each month, either. (Actually I have only ever met one adult in my entire life that didn’t have a credit card!)

If you’re looking for a quick fix, no effort solution… then stop reading. There isn’t one (not a legal one, anyway), and like most things that are worth doing, getting rid of your credit card debt (or stopping it from accumulating in the first place) requires some serious effort.


Let’s face it, we’ve all done it – you start off being sensible, only using your credit card occasionally, and always paying it off in full each month. Then you go mad one month or your expenses go mad, and suddenly you’re looking at waaaaaaaaay too much to pay off in one go. It takes a month or less to get to this mess, but boy it take a lot longer than that to get out of it. However, it can be done. (I’m not going to go into choosing a card in any detail but look around if you’re getting one for the first time, there are definitely some better ones and much, much worse cards to choose from!)

Budget your money. Analysing what you spend in an average month and comparing it to what you actually earn can be an enlightening – and perhaps painful – experience. When rounding figures, always round your incomings down and your outgoings up. This allows you some margin for error. If you don’t have more coming in that going out, something has to change. Think about it and you’ll probably see some room for realistic savings without becoming an acetic. Then add in your monthly card / loan repayments. Still got enough? If not, something else has to go. Though the best course of action is to pay off the complete amount each month, failing to do this will not in itself cause you to fall into serious credit card debt. The key is to stay in control of it, not let it control you. Swapping amounts owed to another card with a 0% interest rate for 6 months is all well and good, but unless you have a definite plan for clearing the amount owed, you’ll be no better off in the long run. Many people swap the amount over, pay hardly anything off in the 6 months special offer period, and in fact continue to buy things with both credit cards – or 3, 4, 5, or even more cards, and end up putting themselves in a position of never being able to get out of debt. Debt management companies may work for some people I guess, but really why would you want to pay someone to do what you should be doing yourself?!? One thing I would say if you’re planning to swap money from one card to another is check the charge for this service first, and compare it to the amount you’d save from the lower interest charges in the first 6 months. If there’s no significant advantage, you may be better off leaving it where it is and just getting on with paying it off.

If you are in the position of owing a lot of money on one or more cards and finding it difficult to pay it off, don’t despair. It can be done. One thing you need to get into your head right away is that it’s not impossible, but it might be impossible to do it quickly. So set a long-term plan for yourself. The real key is to make sure you pay at least your interest (plus repayment protection if you have it, I cancelled mine and what a difference it makes to my monthly charges! Think carefully about doing this if you’re planning to, I ended up deciding it was just throwing money down the toilet and even if I was ever in the position to utilise it they’d probably wheedle out of it somehow. Your circumstances may differ however, so don’t cancel your RPP rashly) plus a set amount that you determine. (If you have something which is automatically charged to your credit card each month, add that to the above amount.) Don’t worry if you’re not able to pay much off each month, or if some months you can’t pay as much as others. As long as you pay more than the interest and other charges each month, your debt will come down – and so will your charges, imperceptibly perhaps but they will come down. The one thing you musn’t do if you want to repay your debt is keep paying the minimum fee set by your lender. Most credit card companies will only let you pre-set your monthly payments to the minimum or the whole amount, with only a few giving you the incredibly useful option of paying a set amount each month. They do this because as long as you only pay the minimum amount you’ll hardly pay anything off the capital, which means you’re continually giving them money – for nothing! A lot of people either forget or find it simply too much effort to make an extra payment manually, by debit card, at the bank, or with a cheque – but don’t neglect this or you’ll end up paying for it many times over. If it’s going to take you 4 years to completely pay off your card, it’s still worth doing.

If you must pay for something with your credit card while paying off the debt – and it really is unavoidable – make a plan to add 10 a month or whatever in addition to what you’re already paying. View it as a separate debt. If you can’t, it’s just another few months till you’ve completely repaid… If you can at all avoid it though, don’t use your credit card at all while you’re paying it off. Make the paying off of your debt a priority, or you probably won’t do it at all. And don’t fall into the “I want it all and I want it now” mentality that marketers would love us to have – if you can’t afford something, don’t buy it (yet). It’s as simple as that. Wait, save, plan, pay off your debt, then buy it when you can. You don’t want to become a slave to the credit card companies.

One final thought – you may want to get rid of that debt as quickly as possible, and quite naturally so, but make sure you have a reasonable and sustainable plan of repaying it – otherwise you will end up without any resources when the next big bill comes in, will have to use your credit card to pay it off, and start all over again…

Well, there’s my two penneth worth. I hope it helps someone. Happy debt-busting!

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Member: Dave Seaman
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