DIY Debt Relief

You can begin working to reduce your credit card balances in several ways on your own. Here are just a few tools you can use to get out of debt faster.

• Cut up your credit cards or put them away. If you don’t have access to your credit cards, you will be less tempted to make impulse purchases when you don’t have the cash on hand. As you continue to pay down cards without adding to the balance every month, you will dig yourself out. Hide your cards. Live on cash. Act like your credit cards don’t exist and then you can be free from them.

“The safest way to double your money is to fold it over and put it in your pocket.” —Kin Hubbard

• Focus on paying off the credit card with the highest interest rate first. Then pay off the second card and third in the same way. As you make progress you will be encouraged to keep going to paying down your debt. This has been called the Snowball Effect. A little savings grows bigger and bigger with each card you pay off.
• Send more than one credit card payment a month. Believe it or not, you have an APR (Annual Percentage Rate) that relates to a Daily Rate, which is the APR divided by the number of days in a year (365). If your Interest Rate is 18%, then your Daily Rate is .049315%. Let this sink in. You are getting charged interest on your credit cards every single day you carry a balance. When you send in more than one payment a month, you reduce the balance that your Daily Rate is figured on. That, in turn, saves you money every day on the daily rate charged. Then you will be able to shrink your balance much more quickly.
• Create a budget and stick to it. If you can develop a budget that gives you extra money each month, then use that to pay down your credit cards. There is little doubt it’s the most expensive money you use. So, saving money and investing in yourself by paying off your credit card bills will create a lifelong skill of living on a budget, paying off your credit card bills and using extra dollars for building savings.

“Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the ‘got to have it’ scale.” — Zig Ziglar