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7 Simple Steps to Get out of Credit Card Debt

Learn the 7 simple steps of credit card rehab.

Photo: Veer

Step 5: Lather, Rinse, Repeat
Pay the minimum amount due (on time, every time!) on all accounts except the one with the highest rate. Send every extra dollar, every quarter you find on the street, every dime you earn over time, and that crumpled $20 to the high-interest rate winner -- well beyond the minimum your lender hopes you'll pay from now until eternity. Lather, rinse, and repeat until you've washed each debt right out of your hair.

Step 6: Be Prudent
Be aggressive in paying down debt, but don't get so ambitious that you risk missing minimum payments on your mortgage, automobile, or any other secured credit account. (Secured means that if you miss enough payments, the bank can show up and take your stuff.) Give yourself props each day you keep your cards in your wallet.

Step 7: Resolve to Spend Less Than You Make
If you can't pay for it today, then you can't afford it. In a household built for two, that goes doubly. Spend less money than you make on a consistent, long-term basis and you can amass a nice chunk of change in just a few months. Look at you! Not only are you out of debt, you're saving for the future!

Nestpert Dayana Yochim of The Motley Fool, an investing and personal finance website, and author of The Motley Fool’s Guide to Couples & Cash: How to Handle Money With Your Honey

Avoid debt altogether by working it out with your spouse.

-- Joanna Pompilio

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