~ Credit Cards ~

Credit card debt seems to be the plague of this age we live in.  The ease of not having to actually hand over cash from our pocket or purse disconnects us from the reality that we are actually reducing our future welfare.  Normally this is a conscious choice, you pay from funds that can provide for future needs for a present need.  But at least you make that choice based upon a priority that you have set.  With the ease of the credit card that reasoning step is eliminated.  You do not consciously make a decision.  Maybe at first you did.  But now it is a habit to "Just put it on the card."

First let us tell you that the following advise is something that we have had to learn and implement ourselves.  We are not suggesting a plan that we have not done ourselves.  Yes it is painful, but that is in equal amount to the temporary joy that was felt as the debt was accumulated.  The joy felt as one spends money pales in respect to the happiness of being financially responsible!

Second we felt that this information which we paid dearly for should be made available for free.  We feel that it is wrong to charge for this information.  There are a lot of financial advisors out there that charge a large fee to tell you what is on this page.

4 Steps To Freedom

1. Stop using your credit cards!  If you get a credit card offer in the mail, rip it up immediately!
   
2. Calculate a budget that allows for all your current bills and the accumulation  of a savings account.  You need the savings account to be your reserve so that you can avoid incurring any more debt.  You may have to sacrifice a present desire for this, but it is really worth it.  This savings account figure must be adjusted to allow you some funds for accelerating your payments.
   
3. Rank all your credit from the smallest to the biggest.  Pay all your bills but add to the smallest bill the acceleration funds you set aside in step #2 above.  This will start the snow-ball rolling down hill in your favor.  Keep at it until the smallest credit account is paid off.  Then apply the amount you were paying to the first account (including the acceleration funds) to the next account.  Now it gets to be fun!  Nothing feels as good as paying off a debt!
   
4. As you bring each credit account balance to zero, write each credit company a letter CANCELING the account.  Click here to see a sample cancellation letter. This is very important. You want to clean out your credit report as soon as possible.

If you own a home, refinancing may be one source of money to help get rid of the credit card debt.  Although some lenders will allow you to borrow up to 125% of the value of your home, do not.  Keep the total mortgage under 90%.  If all goes wrong and you have to liquidate your assets, you do not want to have to have the extra burden of an old mortgage settlement after you sell the home!