I made a lot of confessions on this blog and here’s another one: I used to swim in credit card debt years ago. 

It wasn’t that big since I paid for at least more than minimum every month before the due date. Still, whatever angle you look at, it is still DEBT. Thankfully, for my first credit card, my dad paid for the remaining balance while the second one was paid off by my husband. I didn’t have any source of income at that time so they decided to help me pay off my dues.  

In other words, they both gave me a clean slate, hoping that I will learn my lesson and start using credit cards wisely – and I did. I am now an advocate of NO CREDIT CARD policy UNLESS needed because let’s face it, credit card is helpful in emergency (the real ones) situations where cash is not easily accessible. Still, I made sure I use my plastic card wisely since I don’t want to incur debt I can’t even afford to pay. 

I’m sure most of us got stuck in a similar situation at one point. After all, isn’t it convenient to have a shiny card on hand? The question now is how do you get out of it? Here are my five tips to help you get out of credit card debt – and how to stop yourself from incurring them again. 

Tip No. 1: Admit and accept that you have debt. 

It sounds simple but trust me, this is, perhaps, the hardest thing to do. I was in denial at first, refusing to accept the fact that I have unpaid balance that incur interest every month. I avoid the fact that there are envelopes waiting for me in the counter and just put it inside my bag because of fear of opening them.

Therefore, the first step you must take is to acknowledge, admit, and accept the fact that your credit card bill/s need your attention. It’s not the end of the world. There are various ways to help you get out of the debt pool (and the Negative Data Bank!), which you will learn more about later. 

Tip No. 2: Forget about savings – for now! 

I received a book from an officemate years ago entitled, 12 Steps to Build Wealth on any Income.” In one of the sections that talked about debts, the author said that to help you pay off, you should reduce savings and allot more for dues to be able to pay for the existing debts – which, for me, is a decent point. 

Think about this: adding a big chunk of your hard-earned money to your savings account is fine. On the other hand, your credit card bills are piling up because you only pay for the minimum (or a little above it) every month. To help you pay off, reduce the amount for your savings and pay a bigger amount for your credit card bill to minimize the outstanding balance. Eventually, you will be able to see a smaller amount in your bill and go back to saving.  

Tip No. 3: Pay one credit card at a time. 

Who doesn’t want to sleep soundly at night without worrying about any debts? The idea might be tempting but the best way to go about it is to pay one credit card at a time. This means you have to prioritize which among the credit cards you want to pay off first while continuously paying (a little above) minimum amount due for the others. You can consider any of the following factors:

  • Lowest balance due
  • Highest interest rate
  • Highest balance due

Paying any of the three first depends on your preference and whichever works for you. If you want to be able to save more from interest, then pay off your card with the highest interest rate since you can save more in the long run and could use the extra funds for payment to other credit cards. Otherwise, it’s up to you if you want to pay the one with the lowest balance first so you could eliminate one card already or the one with the highest balance. 

Tip No. 4: Keep your partner involved.

This was one of my mistakes when handling m credit card bill. I was fixated on doing everything on my own and refuse to ask help from others. I used up my savings and allowances from my parents to be able to pay for my bills because I don’t want my husband to know that I have debt. Since I am no longer working (I haven’t discovered online job yet), I don’t even know where to get funds to pay off my bills. 

Whatever problems you have, always keep your partner involved, especially when money is on the hot seat. Keeping secrets and hiding bills won’t do you any good. It won’t even help you get out of the situation. Let your partner know your financial standing so you could discuss and make the necessary adjustments to help you get out of debt and in the bank’s watch list.

If you plan to apply for a loan, regardless of the nature, the banks will check your credit standing too. This means they will consider your how you paid your credit card/s and whether you pay in time. 

Tip No. 5: Watch your spending. 

Here comes the challenging part: paying off your credit card while minimizing your spending. 

By this time, you established how much is your outstanding balance and what you need to pay first. You have a plan and slowly executing it. The next and most important thing you have to do is to watch your spending. The big “Sale” sign may be tempting but if you want to pay more on your bills to minimize the outstanding balance, then learn to say no. Spend on the basic necessities and if your child doesn’t need that new shoes yet, then don’t buy. Impose discipline and remind yourself that your credit card bill needs your attention and money too. 

Just in case you plan to use your credit card, make sure to pay the amount in FULL come billing time. This way, you won’t incur interest and minimize the possibility of accumulating unpaid purchases.  

Getting out of credit card debt may be tricky. I know because I’ve been there. Just take one credit card at a time and be wise with your spending. You’ll get out of it even before you notice.