In the current economic climate many individuals and families are starting to realise that they need to tighten their belts and reduce their spending. At the same time this also means reducing some of the debts that might have built up when times were good and credit was offered on tap. For most people these debts will be found on store cards and credit cards and these will be the very first things that they look to pay off to get themselves some financial stability.

That being said, with most jobs cutting wages and most shopping baskets seemingly more expensive these days, not to forget the price of petrol at the pump, paying off credit card debts is easier said than done. In addition, once they sit down and work out how much they owe on all their cards together many people quickly realise that they have accumulated some serious and often daunting debt. So where do you start in order to clear that debt? The following steps will help achieve a significant reduction in your debts:

(1) Start off by gathering together each and every credit card statement and store card statement that needs to be cleared. Set them all down on a table next to each other and then calculate how much you will need to pay off in total. Have a stiff drink!

(2) Write down a figure for your monthly salary and also how much of that you can realistically set aside for clearing debts. Allocate as much as possible. Next write down the minimum payments needed for each card and then add them together to get a figure for how much you need to pay at the bare minimum every month.

(3) Compare your monthly salary and the minimum payments. Work out if you can manage that minimum payment figure or, better still, if you can overpay every month.

(4) If you can’t reach the minimum payment figure then you need to call your credit card company and talk to them about the situation you’ve got yourself in and ask them if you can strike a deal so that you can at least pay something back each month. It is far better to do this than let yourself fall even further behind and end up accumulating charges and interest.

(5) Another option is to see if your bank or any other financial institution can provide you with one single consolidating loan that will organize all of your debts into one monthly repayment, most likely at a more affordable and manageable rate. Howver, be aware that if you choose this option you absolutely must tear up all your cards and close down the accounts, rather than end up with the burden of a loan and letting the cards build up again.

(6) If, on the other hand, you are able to make the minimum payment, or pay over and above the minimum then you should start clearing the cards immediately. Tear them up so that you cannot spend anymore money on them and promise yourself not to use them at the very least until they are clear. Even if you are only paying the minimum the debt will very quickly start to drop as long as you don’t spend anymore – very soon you’ll be paying off not just the interest but also a portion of the principle too.

(7) Make sure you pay off the cards with the highest rates first. If you have any extra over and above the minimum payment, take it off of those high rate cards. Once you have cleared them, move on to the cards with the next highest rates.


With the economy in the state it’s in, people are trying everything they can to make ends meet, from cutting their spending to reducing their bills at home, from tax reduction to working more hours. But the simplest and best way to improve your financial situation is to clear your debts as quickly as possible.



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