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Credit Card Debt Repayment Plan

We have already posted about the woes of bad credit. If your credit suffers, then you tend to pay more for many things like auto loans, mortgage, and even insurance! However, even if you can maintain your credit, unsecured debt like credit card balances, costs you a lot of money! However, if you hold 5 credit cards, with a total balance of $9,000, the task of ever getting them paid off may seem like too steep a hill to ever climb.

Debt is Like Getting Fat

But just like you probably did not run that debt up in one day, but it creeped up slowly, you can chip that debt away slowly. I liken the process to losing the extra 20 pounds that a middle aged person may have gained over ten years. All of a sudden a big wedding comes up, and you want to lose that weight in two months! However, this goal may not be realistic. If it took you ten years to slowly gain 20 pounds, it may be realistic to assume that you should set yourself a reasonable and healthy goal to lose that weight in 10 months, or something like that.

Why is it so hard to start paying off debt?

When you go on a diet, you usually experience a larger weight loss in the first few weeks then you do later on in your diet, as you get closer to your goal. Paying off debt does not work like that. Actually, as you get closer to paying off debt, your total interest charges will get lower and so it is easier at the end.

However, you can get closer to that point gratification by taking some tips from experts. If I had, say 5 credit cards to pay off with varying balances and minimum payments, I would attack it like this. First, store those nasty pieces of plastic out of site, like maybe even in a safety deposit box. You’ll never get anywhere if you keep using them. Next I would arrange them in order from easiest credit card to pay off to hardest credit card to pay off. Then I would also make sure I have a savings account with some money in it. To help determine which unsecured balances are easiest to pay off, look at our  simple online credit card payoff estimation calculator.



Every month you have 6 payments to make. Attack the lowest balance with a goal to getting it paid off as fast as possible. Pay a little more than the minimus on the other balances. You may change the order if one credit card sticks out as having a particularly high interest rate. You may also call your credit cards and ask for them to lower your interest rate. This works. If you have a good history of paying on time they probably will work with you, and this will not damage your credit at all. Then make the sixth payment, even if it is small, to your savings account.

You will see that, as that first credit card gets a lower balance, that the minimum payment becomes much lower! However, you have to stick to your plan to pay a set amount and get it wiped out. Let’s say that first credit card has $356.00 on it. If you can possibly apply $100 a month to it, you have less than 4 months to go. Then you can spread that $100 over to the remaining 4 cards and your savings account.

Look, at the end of a couple of months you will have satisfaction. One credit card is paid off, and you actually have an emergency fund in a savings account! You will also have a clean credit card which, hopefully, is still safely stored in a safety deposit box for emergencies.

And just like a diet, don’t punish yourself for falling off the wagon during holidays or because you had to get your transmission fixed. Just take a deep breath, and climb right back on. Even if you have to use the credit card every few months, you will still probably make progress. At the very least, you are probably better off than you would have been without a plan.

Of course, this all assumes that you do have income coming in, and that you can cut some luxuries out of your budget in order to stick to your plan. If not, it may be time to examine other debt relief options. Just use common sense for your debt cures. Here are some tips to avoid credit repair scams.

get out of debt, repay debt, debt repayment plan

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