How do I get out of credit card debt?

Question

I am married and have two kids. We both work. I work an extra job just to make ends meet. We make good money. But we have so much credit card debt that I do not know what to do. We have a house but it does not have much equity in it due to we just built it several years ago.

Answer 1

If you can manage it, the best thing to do is reduce your spending across the board. Use the credit cards less and try to reduce spending on other expenses (eating out, gas bill, electricity, etc.) too.

You should also pay off as much of the credit card debt as you can every month. If you can transfer balances, transfer as many of the balances as you can to your lowest interest rate credit cards. If you can do this and have no balance on several of your cards, great!

Just remember not to cancel the credit cards though. If you'd like to improve your credit score, one measurement they use is your total credit card debt versus your total credit limit. If you cancel cards, your total limit goes down and the debt to credit limit ratio for you will get worse.

If worst comes to worst you can always look for credit card debt relief. There are companies out there that will basically give you a loan which pays off all of the credit card companies. Look for government agencies first, non-profit debt relief second, and private debt relief companies as a last resort.

Hope that helps and best of luck!

Answer 2

Quit using the credit cards, find every way to save possible, pay more than the minimum amount on the cards each month, borrow money from relatives at a lower interest rate so that you can pay them off.

Answer 3

What my parents did was that they got a loan from their bank, and paid off all of their bills. The loan had a much lower interest rate than the credit cards so they were able to take care of it pretty quickly. Hope it works for you. Good luck.

Answer 4

First, get rid of your credit cards. Second, look at the interest rates you are paying, and pay them off, one at a time, starting with the highest interest rates first. On the others, you will have to pay the minimum payment of course.

Answer 5

This is a link to a not for profit agency that offers credit and bankruptcy counseling. I heard of them through Consumer Credit Counseling Service, which is the only credit service that Suze Orman recommends on her website. They also offer consolidation services. I am currently enrolled in their consolidation service. They lowered my interest rates on my credit cards and put me on a debt management plan.

Money management: http://www.moneymanagement.org/OurProgram/bankruptcy-counseling.asp?CMP=OTC-PBCPRAD

Link from Suze Orman: http://www.suzeorman.com/igsbase/igstemplate.cfm?SRC=MD012&SRCN=aoedetails&GnavID=84&SnavID=20&TnavID=&AreasofExpertiseID=5

Answer 6

Here are some websites to help you learn:
http://www.debtproofliving.com/
http://www.bankrate.com/
http://www.daveramsey.com/
http://www.slice.ca/Shows/ShowsPage.aspx?Title_ID=93097
http://www.debtorsanonymous.org/
http://www.crown.org/
http://www.miserlymoms.com/
http://www.oprah.com/money/debtdiet/experts/qa/debtdiet_qa_budgets.jhtml