1. First rule of paying off your credit cards, stop using them!
Your balances will never get paid off if you don’t take a break from them. If you are in a tough situation and are using them to help pay for your cost of living then your problem is much bigger then you think. If this is your situation, you need to take a close look at where all of your money is going and make some hard decisions on your spending habits. Buying a coffee on the way to work and other take out foods are a luxury you simply cannot afford at this time. Bring a thermos and your lunch to work and get back to cooking your meals from scratch to avoid spending to much money.
2. Pay off the lowest card balance first.
If you have more then one credit card, start by paying as much as you can on the one with the lowest balance and make minimum payments on the others until it is paid off. Some may argue that you should start with the card that has the highest interest rate first. However, the satisfaction of completely paying off one card will provide the ongoing motivation needed to pay them all off.
3. Use a cascading strategy.
Once you’ve paid off your first card, continue to shift the payments over to the next card and so on until all of your cards are paid off. After you’ve eliminated your high interest credit card debt, its now time to use these same payments to have some emergency cash at home. Upon saving your emergency cash, start putting these payments in an emergency saving account until you have enough to cover 1-3 months of your household bills.
Life can be a lot less stressful when you are able to pay for unexpected car or home repairs with cash instead of high interest credit cards and loans.