Credit Cards

3 Steps to Clear Your Credit Card Debt

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The average credit card debt per household that has credit card debt in this country is close to $16,000, according to the Federal Reserve. In some families it’s even more.  So, how to deal? How to cope? Here are some steps.

Get Honest. Don’t ignore your debt. Don’t pretend it doesn’t exist. Face the truth and add up every penny you owe. This is an emotional step and can be difficult to take. We sometimes feel out of control, but the truth is we can all work towards becoming debt-free. 

Attack the Highest Rate Card, First. Mathematically speaking, that’s your most expensive debt, so it’s best to get rid of that first. Put most of your disposable income towards that credit card and do the best you can with the other cards, until that one is paid off. Then, begin to be more aggressive with the next credit card bearing the highest rate.

Avoid Minimum Payments. While your monthly statement says you only need to pay the minimum, understand that at that pace you could be in debt for several years and in the process pay hundreds, thousand of dollars in interest payments. The best thing to do is to pay double, triple, quadruple the minimum. Better yet – look at the back of your credit card statement and follow the stated 3-year pay off plan.

Stick to Cash. A cash diet ensures you won’t continue to rack up debt, as you’re paying off your statements. Credit experts have found that we may save about 20% of our money when we use cash because once the cash is gone, it’s gone.  Meantime, a credit card may give us a false license to overspend.

If you need serious help with your debt, you can always contact the national foundation for credit counseling where you can connect with a local credit counselor in your area. Your first meeting is free and the counselor will assess your situation and give you some advice on how to manage your budget and debt load. Check out

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