Understand these basic facts:

• According to the American Bankruptcy Institute, nearly 85-90% of bankruptcy filings were due in part to excessive credit card debt.
  
  
• Households receive on average 20 credit card offers per year.
  
  
• Credit card companies make money when you become a "revolving" credit card holder — which means the holder maintains a balance from month-to-month.
  
  
• Credit card companies make money when you pay only the minimum required amount — which minimum amount is interest plus a small percentage (around 0.5%) of the balance outstanding.
  
  
• Credit card companies make money when you accept and then spend up to the credit limit offered.
  

With these facts in mind, the card company's business strategy is to get you to:

• accept their card using pre-approval offers;
• charge out the maximum credit limit awarded;
• pay interest-only payments each month;
• and maintain a credit balance from month-to-month.
  

Now Consider This

If you paid just the minimum payment on a $4,800 credit balance at the average annual rate of 17% plus 0.5% for principal reduction, it would take you over 21 years to pay it off your balance (considering that you did not have any other charges).

That means paying $13,376.35 in interest charges alone, for a total repayment of $18,176.35 for the privilege of charging $4,800!

No wonder that credit cards are one of the lender's most profitable product lines.

Use the worksheet to add up your credit card debt

Step 1a: Use the worksheet at right to list your current credit card debt balances and interest rate APR. Include all credit cards; i.e., retail cards, gas cards and other revolving charge cards. Step 1b: Hit "Calculate" to total your total credit card debt and the monthly interest rate charges. Note the fees that you pay each month just having this debt. The goal is to rid yourself of this obligation. Step 1c: If you paid the suggested minimum payment each month, it would take about 22 years before your debt will be paid off. Your objective is to reduce or eliminate this debt either by paying extra each month or by consolidating. Click to view payoff options below

Credit / Retail Cards Credit Card 1 $ % Credit Card 2 $ % Credit Card 3 $ % Credit Card 4 $ % Credit Card 5 $ % Credit Card 6 $ % Credit Card 7 $ % Credit Card 8 $ % Credit Card 9 $ % Credit Card 10 $ % Your total outstanding credit card debt $: Your current monthly interest rate charges $:

Use these calculators to estimate your payoff schedule and amount.

• Use the "Monthly Payment" calculator
  to estimate the amount you need per month to payoff your debt over a given period of time (in months).
  
  — enter the best interest rate you can receive
  — enter the number of years you need to repay the debt
  — press "calculate" to estimate repayment amount
  
  
  
• Use the "Repayment Period" calculator
  to estimate the time it will take to payoff your debt with a budgeted fixed amount that you can pay each month.
  
  — enter the best interest rate that you can receive
  — enter the amount you would like to pay
  — press "calculate" to estimate payoff terms
  
  
  
• Use can also download our "Debt Payoff" worksheet to run your numbers on your desktop: download worksheet
  

Monthly Payment Repayment Period Debt Balance: $ Debt Balance: $ Interest Rate: % Interest Rate:   % Repayment Term: months Monthly Payment: $ * * Monthly Payment: $ Repayment Period:   years months

Use this option if you have minimal credit card debt that can be paid off in 6-18 months

Is this the right option for you:
this may be an ideal option if your total credit card debt is minimal and if you can budget enough disposal income to payoff your credit cards within 6-18 months.

This option will give you the best credit rating protection.

Start by Listing Your Cards:

use the QUICK worksheet to list each credit card
that has a debt balance. Insert the balance amount with its respective interest rate (APR).

Note the card that is charging the highest interest rate — this is the credit card balance that you will pay off first. List that card on your worksheet.

Estimate Your Repayment Schedule:

use the calculator above to schedule an allocated amount
each month that can pay down your selected high interest-rate credit card.

Include in your budget plan the amount you will need to make minimum payments on all other cards.

List the amount that you have budgeted on your worksheet along with the time it will take to payoff the debt.

Reduce Your Monthly Expenses:

as you pay down your credit card, review our section on lowering your monthly bills in housing, transportation, living, recreation, and more.

click to view "lowering your bills"

Any monthly cost savings can be used to pay down your credit card debt faster.

Continue Payoff:

once you pay down your high interest-rate credit card, find the next highest interest-rate card and repeat these steps for each card — paying down the highest interest-rate card first, and on down to the lowest interest-rate card.

Is this the right option for you:
this may be an ideal option if you have significant credit card debt that can be paid off within a short period (12-36 months) and if you maintain a better-to-best credit rating

Find Credit Card Transfer Balance Programs

if you have a good credit rating, card issuers will solicit you with attractive credit card consolidation (transfer balance) programs.

These programs allow you to transfer any outstanding credit card balance that you may have over to this new card that has a very low interest rate for an introductory period of time.

You may also contact your current credit card issuer about transferring and consolidating other credit card debt under your current card.

Inform them that you are shopping to consolidate all or part of your credit card debt under one card — if your credit rating is good, they will want to keep you as a customer.

Find the transfer program that offers a super low interest rate at transfer terms of 6 or more months. Anything less than 6 months is not worth the trouble. Avoid programs that charge a transfer fee. The fee will wipe away your low-interest savings.

Link to our credit card listing for debt transfer programs

Make sure you read the fine print.

List Your Cards

use the QUICK worksheet to list each credit card
that has a debt balance. Insert the balance amount with its respective interest rate (APR).

Payoff Your Cards

take the transfer program that offers the best terms:

• lowest rate,
• longest term,
• and zero transfer fees.

Use the program's transfer checks to payoff those credit cards listed in the worksheet.

If your total credit card debt exceeds the transfer program's credit limit, you may need to use a second or third balance transfer program.

Schedule Your Pay Down Amount

use the calculators above to schedule a payoff amount
that significantly reduces your consolidated amount during the transfer period.

List the amount that you have budgeted on your worksheet along with the time it will take to payoff the debt.

Maintain Terms

since most transfer programs offer card consolidation terms of 6-12 or more months — significantly lesser time than what you may need to payoff your card debt — you may need to play the transfer game when one program ends and another begins.

Keep note of other transfer balance offers that come in the mail — hold on to those offers that carry attractive terms.

Be careful not to jump to another transfer program within short periods. Every time you sign up for a transfer program, an inquiry is made to your credit report. You want to limit credit inquiries to "one" inquiry every "six or more" months.

Payoff Amount

if your budgeted monthly payment does not payoff your credit card debt with 12-24 months, you may need to consider a debt consolidation program under Option 3 below.

Try to Lower Your other Living Costs

as you pay down your credit card, review our section on lowering your monthly bills in housing, transportation, living, recreation, and more. Your monthly cost savings can be used to pay down your credit card debt faster.

click to view "lowering your bills"

Important Note

tuck the credit card that has your transfer balance away. Do not use the credit card for any credit card purchases. You want to avoid interest being charged on everyday purchases. Use a different credit card for purchases so that you can take advantage of the 25-day grace period.

Be sure to review credit card management techniques — you want to avoid getting yourself back in debt.

Is this the right option for you:
this may be an ideal option if your total credit card debt is significant and if you need a consolidation program with payoff terms of 3 years or more.

This option is ideal for those who need to consolidate credit card debt with other loan debt.

By consolidating your debt under repayment terms of 3 or more years, you basically lower your monthly payment by extending your repayment period.

Calculate Amount to Consolidate

use our Debt Consolidation Worksheet and list each credit card
that has a debt balance. Insert the balance amount with its respective interest rate (APR). Hit "Calculate" to total your numbers.

Set Repayment Plan:

the debt consolidation worksheet will calculate your monthly payment

Note that your payoff term will be anywhere from 5- to 7-to 10-years or more.

Calculate your estimated monthly payment; note the monthly savings you can anticipate by consolidating your debt under extended repayment terms.

Run different repayment scenarios to design a payoff plan that works for your.

Loan Consolidation Options:

1) If You Own a Home:
by using the security of your home, you can secure a home equity or home refinancing loan at low rates with repayment terms of 5 or more years. You can use this loan to consolidate your credit card and other loan debt.

This option allows you to setup a repayment plan with extended terms that can significantly reduce your monthly payment (depending on the amount being consolidated).

You can also pay extra each month to quickly payoff your consolidation loan.

Get up to four national lenders to review a consolidation option that fits your budget. Select the option that works for you. No obligation.

no obligation debt consolidation loan form


2) For those who don't own a home:
this deb reduction option is available for debt holders who don't have a home or who don't have enough equity in their home to consolidate. Debt professionals will tailor a debt reduction plan that works for you.

This option allows you to setup a repayment plan with extended terms that can significantly reduce your monthly payment (depending on the amount being consolidated).

no obligation debt reduction request form

Lower Your Monthly Costs:

as you pay down your consolidation loan, lower your monthly bills in housing, transportation, living, recreation, and more.

Click to view "lowering your bills"

Your monthly cost savings can be used to pay down your debt faster.

Is this the right option for you:
use this option if you find yourself unable to repay your current debt balances and want to avoid bankruptcy.

This may be the right option if circumstances such as unemployment, loss of income, or other unfortunate event prevents you from repaying your debts.

This option is also recommended if you have collection agencies threatening action. Counseling services can advise and protect you from adverse action.

Credit Counseling Services:

credit counselors will be able to discuss your situation with your debt lenders to either forgive part of the debt or structure a repayment plan that fits your budget.

They will also work with you to establish a monthly repayment plan that fits your budget.

How the Program Works:

you first complete an enrollment form that authorizes the credit counselor to discuss your situation.

click here to start that from our national list of debt counseling professionals

the credit counselor will contact your creditors to negotiate a repayment plan that is significantly less than you currently pay — why? creditors will welcome partial payment rather than no payment.

credit counselors will then setup a monthly repayment plan that works for you

you will then make your monthly payments to the credit counselor who in turns divides the payment among the creditors based on the negotiated repayment amount

in most cases, creditors will inactivate your credit cards to avoid charging additional debt.

is a key measurement that credit reporting agencies use when quantifying the credit rating of an applicant.

Card holders who pay their card balances on time, at the required amount, will receive a favorable credit rating that translates into lower interest rates on mortgages and consumer loans.

Card holders who are late in paying their credit cards payments, often not paying the required amount as due, will receive a less-than-favorable credit rating that translates into rejected applications or higher interest rates for mortgages and consumer loans.

We have Two Credit Card Management Programs for Review:

1. Program A: for card holders who control their credit card use and payoff credit card balances in full each month.
   
   
2. Program B: for card holders who carry credit card debt and pay only the minimum balance each month.

These steps are for card holders who have the discipline to control credit card purchases. Your objective under this program is to build a usage pattern that strengthens your credit rating and builds credit card benefits.

Step 1

First, you will treat your credit card like cash, deducting from your money account the purchases you make with your card.

You can either deduct the amount by making an entry in your checking register, or by using your Personal Financial Management Software (PFM) such as Quicken® or MS Money®

Basic rules for this card management program:

• keep good accounting
  
• record every transaction
  
• deduct money from your money account for each card purchase
  
  Download guide:
  see our download on rebate card accounting
  and rebate benefits

Step 2

Pay the entire balance each month. Never carry a credit card balance. The money to pay the credit card balance should be available from your deducted money savings under Step 1.

Step 3

Limit your credit cards to 2-3 cards maximum. Select your cards with the following features:

• no annual fee
• 25-day grace period
• rebate incentive or other incentive program
• VISA, MasterCard
• single-cycle billing
  
  view our credit card index for sample programs
  

Step 4

Note that on average, credit card users spend about 10-12% more on items than buyers who pay with cash. That is why you should establish a monthly budget to curb your spending.

Use your credit card for all budgeted essentials such as groceries, utilities, rent, etc.

Step 5

Understand the benefits:

• strengthen your credit rating by paying large balances each month
  
• gain 25-days use of your money that can be earning interest
  
• earn rebate benefits such as airline miles, retail rebates, auto points, etc.

Step 6

Make a quarterly assessment.

If you find yourself spending beyond your budget (based on the ease of credit card use), you may need to switch to Debit cards or cash to curb your spending.

These steps are for card holders who lack discipline to control credit card use and who have incurred credit card debt in the past.

Step 1:

Select two cards from your inventory of cards. Select the two cards that offer the best benefits:

• no annual fee
• 25-day grace period
• low interest
• VISA, MasterCard
• single-cycle billing

If none of your current credit cards fit these benefits, find a credit card that does:

view our credit card index

Step 2:

Take a pair of scissors and cut all of your cards in half (except for the two cards you selected).

Store the pieces in a jar as a reminder of your credit management program. Tuck the two remaining cards away for emergency use only.

Step 3:

Enroll into a pre-paid credit card program. Pre-paid cards work exactly like credit cards but function as a cash card. You load to the card the amount you need and budgeted. Use the card like any regular credit card to make purchases, arrange reservations, etc.

The advantage of pre-paid's is that you limit "instant gratification" since the amount you spend is set by the amount you budget and load to the card.

View how pre-paid cards can be used to control debt

Step 4:

Establish a family budget. Part of your budget will include a debt repayment plan.

See personal budgeting

Step 5:

You will now use your pre-paid card for your everyday expenses. If you don't have enough cash loaded to the card, adjust your monthly budget accordingly.

Step 6:

As you payoff each credit card balance, call the creditor and request that they close your account (you may need to mail your card back).

Note: it is important that you close your account to remove the credit card from your credit report.

Throw away any new credit card offers that come in the mail. Hang up on telesales representatives hawking credit cards programs. Refuse to enter into any financing agreement with a furniture or home improvement retailer.

Step 7:

After about 12-18 months using PRE-PAID CARDS ONLY, you can now jump to Program A above for maximizing your credit card benefits.