Here’s How to Get Out of Credit Card Debt

While we all would ideally pay off our credit cards in full every month, that doesn’t always happen. Plus, modern life often forces us into debt.

If you want go to shopping, buy a car, or own a home, you’ll most likely take out loans to pay for these things. Even if you do keep your credit card usage in check, it’s difficult to remain completely debt-free.

But fear not! While your mountain of debt may be daunting, it’s possible to get to the top and clear your financial burden!

In this post, we are going to tackle your credit card balances.

Settle Your Credit Card Debt

Try these tactics to reduce and eliminate your credit card debt:

1. Pay off more than you use. The only way to gain ground on your credit card balance is to pay off more than you use. If you make the minimum payment of P2,000 and then spend P5,000, you’re not going to be getting out of debt anytime soon. Also, be sure to take into account the interest charges as well as other fees when calculating each month’s total expenditure.
2. Pay off small balances first. If you have a card with a balance of only a couple of hundred pesos, paying that one off first will quickly eliminate one bill altogether.  On top of that, eliminating the balance in your credit card will give you a motivational boost to use pay your credit card balance wisely.
3. Make high interest cards the priority. While the above rule is helpful in a particular situation, focus on settling higher interest cards first and knock them out of the way.
4. Once a balance is paid off, use the money for that payment to pay off other balances. Knocking a credit card balance out is a major relief! It’s one less payment you have to worry about and one less monkey on your back. Use this success as momentum to take care of the other bills.

Follow this strategy:

  • Pay off credit card #1.
  • Next month: Add the funds to your payment for credit card #2.
  • Pay this doubled amount on credit card #2 every month until it’s paid off.
  • Once those two cards are paid off: Add the funds from credit cards #1 and #2 to pay card #3.
  • Pay this tripled amount on credit card #3 every month until it’s paid off.
  • Next: Add in the payments from cards #1, #2, and #3 toward card #4.
  • Continue this strategy until you’ve eliminated your credit card debt.

This will greatly speed up the overall process of getting your cards paid off and wiping the slate clean.

What’s really amazing is that, once you’ve paid off your first card, you’ll be able to use this strategy without paying more for your monthly bills than you were in the first place. Yet, the momentum gets bigger and bigger for eliminating that debt, like a snowball rolling down a hill.

5. Avoid skipping payments. If you do miss a payment, they’ll add the missed payment to the next month’s bill in addition to the interest, late fees, and maybe even over-limit fees. This could even cause your annual interest rate to increase. Once this starts, it’s difficult to get out of the situation. The charges add up quick and your balance will skyrocket.

Not only will this affect your balance, but the credit card company will also call you. Avoiding the call only makes things worse. You would think that they would get the point, but they don’t. They will call, and call, and call, and call. It’s incredibly annoying and you’re better off doing whatever you can to avoid missing the scheduled payment.

6. Debt consolidation can be your friend. Often times, it beneficial to consolidate your debts into just one balance from one creditor. Not only you can take advantage of a better interest rate, you’ll also eliminate a couple of your monthly charges.

If you can get a loan from the bank, it can help you out. Using that money to pay off your credit cards will reduce your overall interest charges. When going this route, avoid using your credit cards again after paying them off. That defeats the purpose entirely and will result in your debt becoming worse than it was before you started.

Many credit card companies offer a lower interest rate for the first year on a new card, and they invite you to transfer your balances from your higher interest cards to your new one. On these offers, be sure to read the fine print. Many things, including one late payment, can void the initial offer and result in an increased interest rate even higher than you had on your old cards.

Consolidating your debts can free up money that you can use to pay down your remaining balances. It’s one more way you can get out of debt without using any more money than before you started.

7. Use your salary bonus to pay down your credit card debt. If you come across some extra cash, use the money to pay off as many of those balances as you can. In essence, your windfall is multiplied when you think of all the money in interest charges it will save you.

Plus, the faster you become debt-free, the faster you can use your money for whatever you want rather than just sending it all to your creditors!

Eliminating your credit card debt can bring you immense relief and greatly enhance your financial future.

So what’s next after you settle all of your credit card debt? Should you get rid of it? My answer is: “it depends” on how you are going to use it, if you use your credit card to automate your payments like payments for utility bills, insurance, subscriptions, etc., then I would suggest that you keep it for the sake of convenience.

How is Motivation Related to Financial Goal Setting?

Financial planning is by description a prospective exercise. Since we can’t anticipate the future, we have to make certain assumptions about what may occur, and then plan for contingencies.

The process of setting and then achieving financial goals is the best way to get from where you are today to where you want to be in the future. As someone once said: “Success is goals- and all else is commentary”. Your time and your life are precious assets which are irreplaceable. By learning how to set good financial goals and then follow through until those goals are accomplished, you will be able to achieve more than you ever before imagined was possible. All that’s required is that you understand and then apply the principles of effective goal setting.

To achieve whatever level of success you aspire to, it isn’t necessary to reinvent the wheel. The principles of setting goals and working hard to achieve those goals have been the process by which millions of men and women have led lives of great success. If you apply the same principles in your life, you can have comparable success. Therefore, don’t waste time trying to discover the secret of great achievement and success. Instead, become an expert at setting and achieving goals. It’s all you need to know and do.

How to Create Your Financial Goals

Most people today never take time to discern their financial goals. They just don’t get adequately organized, and making financial decisions as each new circumstance comes up. Yet a realistic framework is essential to the procedure of accomplishing your goals—not just the goals you’re aware of, but also those you may not even have yet discovered.

To develop a framework of this type, you should therefore try to determine where you want to be, financially speaking, in the future. Are your feelings about money based on factual knowledge or on the influence of others? Are your financial priorities based on social pressures, household needs, or desires for luxury items? How will economic conditions affect your goals and priorities? The purpose of this analysis is to differentiate your needs from your wants. Specific financial goals are vital to financial planning. Others can suggest financial goals for you; however, you must decide which goals to pursue. Your financial goals can range from spending all of your current income to developing an extensive savings and investment program for your future financial security.

Motivation will help you stay focused on achieving your financial goals.

  • Featured Post
  • Financial Planning for Low Income Earners

    “I can’t do financial planning, I don’t have a lot of money”

    Look, I know that you have been through a lot of challenges in your life, and I know that somehow it’s directly or indirectly related to money. If that’s been the case, don’t you think that this is the right time to learn how to manage your finances?

    You see, personal financial planning might sound intimidating to you. You’ve been overwhelmed with the complex calculations, analysis and financial jargons. Remember, having a lot of money is definitely NOT a requirement in financial planning. What we need is a solid framework that can guide to develop the following:

    • Financial Goal Setting
    • Assess your net worth
    • Examine your statement of income and expense
    • Develop your financial plan (Education fund, House, Car, Retirement..etc)
    • Create wealth through Investments (even if you have the slight idea about stocks, bonds, mutual funds… etc.)
    • Review progress
    • Create additional source of income*

    I was stunned when I first tried the process. My paradigm shifted. I realized that by having a clear goal and knowing my financial position, I can motivate myself to change my behavior about money and most of all, about being rich. Let’s slow down here for a moment, I have a question:

    What does being rich mean to you?

    Knowing what “Rich” means to you is important. Otherwise, you might end up mindlessly trying to keep on doing something that you don’t like and unthinkingly trying to keep up with your friends.

    The designation of being “Rich” is different for everyone, and money is just a small part of being rich. Like Royce for example, a former housemate of mine who loves travelling. He once told me that his goal in life is to travel to different places- local and abroad. JP loves eating out and singing at KTV bars where one night might cost him P5,000. Chinny loves joining marathon runs with his wife. All of my friends value different things. I consider myself rich now that I can do these simple things:

    • Help my parents with their retirement, so they can stop working anytime they want to.
    • Have more time on doing the things that I really love
    • Spend on the things that I love doing (e.q. spent lots of money on seminars and trainings- I love learning, but don’t buy a fancy car)
    • Help my family and friends with their financial decisions.
    • Spend more time with my loved ones.

    Before you go further, I encourage you to set your goals today. Why do you want to be rich? What do you want to do with your wealth?

    What Is Learning?


    From Wyatt Woodsmall’s standpoint, an NLP Guru, learning occurs when your behavior changes. Learning is a process we go through from first hear­ing a concept all the way through to applying it. The biggest mistake that can be made when digest­ing information is telling yourself: “I Already Know That”. This invalidates the information going to your brain because it’s just something that you know in your head. You need to apply what you have learned.

    As T Harv Eker says “You don’t know something until you are living it” which ties in nicely with Woodsmall’s definition above. Try catching that voice in your head saying “I Already Know That”, it will greatly enhance the learning process and open your mind to seeing things in new ways you wouldn’t have otherwise. There is however, a big difference between understanding something and learning something.

    “Understanding”, according to Peter Ouspensky’s book “The Psychology of Man’s Possible Evolu­tion”, only occurs when you can clearly see how a smaller concept or problem fits into and connects with the big overall picture and the consequences of that connection. This is systems thinking in it’s truest form and when you get this clear picture of how it all the tidbits of info fit together, and it becomes clear in your head, it makes the actual application part a lot easier.

    A point to make here is that we don’t understand something the first time we hear it. In fact we need to hear a concept many times from many different perspectives before we can make sense of it. Then it’s just a case of apply & test, apply & test.

    To summarize, learning is a step by step process. We start by digesting the information, understand­ing the individual pieces and how they all fit to­gether and then we apply that knowledge. Only then can we truly learn something.



    Photo from rjseg1