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Get out of credit card debt

Nina Spitzer is a SheKnows.com columnist and a freelance writer living in sunny Cave Creek, Arizona.

Credit card rescue

Surprise! There's no finance fairy that will wave a magic wand and help you get out of credit card debt. You earned it by the choices you've made... and only wise choices and commitment will make credit card debt go away. Read on for debt solutions.

Broken Credit Card

Oh, that little plastic card feels so good in our hot hands, especially when those tantalizing sales lure us into their clutches. It's so easy to sign on the credit card purchase line and then walk away with arms wrapped around our prize-filled parcel. Somehow, we never think about how each signature digs the hole deeper and deeper, leaving us screaming in a cavern of darkness called -- DEBT. It's dark and lonely in that hole, but how do we get out? To get out of credit card debt you have to start NOW!

Credit card - Ouch!

The clock is ticking, even as you read. Keep in mind that your credit card balance is eating away at your hard earned dollar every second that it carries a balance. Let me give you an example. Let's say your credit card balance is $12,000.

Balance -- $12,000.00
Credit Card APR -- 18%
Minimum monthly payment -- $300 ($120 principal + $180 interest)

It will take you 400 months, or over 33 years, to get your account balance down to zero! You will have paid out $17,615.69 in interest! OUCH! This assumes, of course, that you haven't used the charge card in those 400 months to increase the balance even more. Frightening, yes? You'd be better off indulging in the perverse pleasure of burning 100-dollar bills than giving that kind of money to the credit card company.

Don't cancel or cut up your charge card

Many charge-a-holics, in a fit of frustration, cut up or shred their charge cards. Your rationale is... by cutting it up into little plastic slivers, you're safe from yourself and using it again to get deeper in debt. True, but you also won't have access to it in the event of a real emergency. For this same reason, you won't want to cancel your charge card. Also canceling your credit cards can hurt your credit score.

Put a freeze on spending

If you're really serious about getting out of credit card debt, you have to put a freeze on spending -- now. You can't fall into the temptation of using it "just one more time" to "save money" on an awesome sale. It doesn't work that way. What you have to do is literally "put a freeze on spending." Put your charge card into a clean plastic container, fill it with water, snap the lid on and freeze it! Then, leave the container in the back corner of your freezer and don't defrost it unless a true emergency hits. Sure, this seems a bit drastic, but tough times take drastic measures. Just take a few deep breaths and pop a piece of dark chocolate into your mouth. You'll survive -- really.

Draw up a budget

Remember -- spending is what got you where you are to begin with. To get out of credit card debt, it's important to set up a budget and stick to it. Decide how much you need to spend on absolute necessities like basic food (not restaurants or take out), rent/mortgage, utilities and commuting to work expenses. Budget a certain amount of each month's earnings to go into an emergency savings account. Then decide what little you can budget for occasional entertaining and clothing expenses. If your credit card balance is truly astronomical, you may want to place a moratorium on your social life altogether until your balance is at zero. It's essential to curtail all unnecessary spending that will eat up money better spent paying down your credit card balance.

Build up your nest egg

If you don't have a savings account, open one. Too often, people are forced to depend on charge cards for emergencies because they have nowhere else to turn for money. If you're a/c breaks down, do you have a stash of money set aside to repair or replace it? Can you afford car brakes when they need replacement? Do you have a couple of months of rent or mortgage payments should you be laid off? If you don't have a liquid savings account ready for emergencies like these, then you need to start one today. Consider this account your emergency fund only to use for... emergencies! Emergencies do not include an awesome sale at the local boutique. If you're one of those rare people who never has an emergency, consider yourself lucky and call this account your nest egg.

Multiple credit cards

Do you have more than one loan balance chewing away at your hard earned money in the form of interest? Now what? Concentrate on paying down the one with the highest balance and highest interest rate first, and pay the minimum payments due on the others. Be careful never to miss a payment or be late on any of them. Your credit rating will suffer if you do.

Scrimp, scrimp, scrimp

Learn to save a buck in every way possible. Every single penny you save will help you get out of credit card debt even faster, because you'll train yourself to take that extra money and put it towards a payment. Consider skipping extra frills like lattes, cable, and weekly trips to the nail spa. Clip coupons. Walk a little further for the better price. (Don't drive; it will cost more in gas.) Learn to bargain shop... though only for necessities. You'll find that is does make a difference.

Speed up the process. Take on a part time job!

How really serious are you about getting this credit card monkey off your back? You might want to consider taking on a part time job and dedicating all you earn to your credit card payments. Larger payments will reduce the number of months it will take you to pay down the balance. Remember, the sooner that balance is down to zero, the sooner your hard earned money stays in your pocket.

Finally -- You've made it!

When you finally get your balance down to zero, be sure you stay there! If you're smart, you won't defrost the frozen charge card and start spending again. Hopefully, you will have learned your lesson. If you DO begin to use the card again, be sure to pay off the entire balance each month. Now that you've made it, you don't want to start sinking into that DEBT hole all over again.

More info on credit cards and debt

How to lower your credit card rates
Top 5 ways to get out of debt
SheKnows Savings, Budgeting, Debt Solutions, and Family Finances
Easy ways to save money

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