The Budget Doctor Q&A
Answer: Thanks for writing. This is my favorite question and I congratulate you on recognizing the importance of getting out of debt. The plan is so simple that it amazes many people. 1. Stop charging. Even if it means smaller payments, the most important step is to put away the credit cards and don’t use them for anything. 2. Pay every card on time and make at least the required minimum payment. It is difficult to decrease a balance if a new $39 late fee shows up every month. 3. Find the card with the highest APR (interest rate) and send them a little extra. All cards are not created equal. Some cost you more than others and you need to eliminate those quickly. That’s it! Obviously the more you pay each month the more quickly you’ll get out of debt, so find an amount you can handle and keep paying it. If you can only make the minimum payment on every card right now, do it. As the balance goes down, keep paying the same amount even though the minimum payment is less. And keep that extra money focused on the highest APR card. When that one is paid off, go to the next highest APR. You can do this! Take charge of your finances and get out of debt. You’ll then have all those extra dollars for other things.
Good Luck! The Budget Doctor