Do-It-Yourself Credit Card Debt Management

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This article explains an incredibly simple debt relief or debt management program that will allow those buried in debt to crawl out of debt in a fast and simple "do it yourself" way.

Things you'll need:

• Budget worksheet or perhaps just some scratch paper
• Credit card account information and balance
• A desire to live a life without credit card debt 

Instructions:

Step 1:
Gather your monthly financial information. You will need to determine the monthly income you are earning as well as the credit card debt figures such as interest rate, balance, and current minimum payments.

Step 2:
Organize and analyze the key information. You need to itemize the credit card interest rates from high to low. Then you need to do this again except use the balance information as the determining variable. Then determine the minimum payments and add them up.


Step 3:
Time to see if you can even handle the minimum payments. If you can afford all the minimum payments then you are in business. If you can not then you may want to strategically consider giving one of the poor lenders the cold shoulder, or you may want to try some sort of debt settlement program. The next step assumes that you can make the minimum payments.



Step 4:
Grasp how this plan will work. Here is the deal. The figure you calculated by adding up the minimum payments is the amount you are going to pay until all the debt is paid off. Even though you are only paying the minimum monthly payment now you will be paying over the minimum payment with in two or three months. This is the beauty  of the program. Mentally you are able to pay the minimums but in actuality you will be paying increasingly more and more of the principle proportionally to the interest.

Step 5:
Strategically tweak the debt management plan to optimize the results. You have ordered the debt obligations by both balance and interest rate. If you can afford it you may want to add 10% to the total minimum payment and apply the entire ten percent to the debt you can pay off the fastest. This will most likely be the debt with either the lowest interest rate or the lowest balance or a close combination. Once this debt is paid off apply the entire amount that you were paying on that particular account to the ugliest looking debt which is most likely the highest interest account. Rinse and repeat.

Tips and Warnings:

• Stick to the plan!
• If you are good at negotiations or at least not terrified of the phone call your lenders and see if you can't get a lower interest rate.
• Do not turn unsecured debt into secured debt. The risk is not worth it in most cases. This means that even if you can get a lower interest rate it is most likely not a good idea to consolidate the credit card debt with a Home Equity Loan. Because if something goes wrong your home will be at risk.

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