Here is the goal of the Start Digging Out Of Credit Card Debt Challenge…to get you started on your way to living debt free. You are not going to get out of debt this month or next month unless you are sitting on a pile of cash that no one knows about. But if you were, I would hope you wouldn’t be in any debt. I wanted to write a series of posts on finding your way to being debt free, as I get several emails every week asking for advice on how to pay off this or how to pay off that. Here is what we are going to do: Every Monday, I will post the next step for getting started on the road out of debt. Sure, some of this you have probably read about before, but I am going to slow it way down and make it much easier for you to follow. I believe that doing one step at a time is much easier than someone saying to you to accomplish everything you want done in one fell swoop. You did not get into debt in a week, and you will not get out of debt in a week. OK? OK.
Your homework for this week is to gather up every credit card you own in a pile. Not your debit card, not your car loan, not your student loans. These are the types of debt you deal with after your credit card debt is all gone. Just your credit cards, each and every one of them. High balance? Go get it. No balance? Go get it. Once you have them each in front of you, write the name of each card, the balance due on each, the interest rate you are paying and the credit limit on a piece of paper. Do this for each card.
Once you have everything listed out, I want you to take the card with the highest available balance on it and put it back in your wallet/purse. This is your emergency card, to be used for emergencies only. No new shoes or lattes at Starbucks with this card. Flat tires and such only. Now take every other card in your pile and put them in an envelope and put them away somewhere. Not far because we will need them next Monday, but just away enough that you don’t touch them.
For the next week, do not use any of these cards you put away, and only use the one in your wallet for emergencies. You have to break the cycle and carrying only one emergency card can help you do that. Next Monday you will need your list and all your cards available for the next step to digging out of your credit card debt, so be sure to be ready! This will be a slow process, as I want people to understand each step as we go along, and not feel overwhelmed enough to not work through it. If you are serious about eliminating credit card debt, you have to start somewhere, and this is how I think you can best get started down that road.
If you missed part one of this series, you can read it right here, part two is available right here, part three is available right here, part 4 is available right here and part 5 is available right here.