List out all of your monthly expenses and categorize them by importance. Obviously, rent or mortgage comes first. Other bills might be utilities, car payment, insurance, etc. Make sure to list dining out, hair appointments, clothing, fun time and any thing else that you either regularly spend money on or splurge.
Figure out what things you can cut out. You will want to put those items into two buckets. Things you have to pay every month and things like buying clothes, electronics, software, games or even movie nights can be put on your optional "bucket".
From your budget list, you will know how much extra money you have every month. Most people will have at least $100 that they spend frivolously.
Now, lay out all of your credit card bills. Rank them by interest rate, high to low. If you have a card with 18% interest, it will be first.
Add up all of your revolving debt. Once you know the total balance, and you are not completely tapped out, apply for a low interest card that you can do a low cost balance transfer. Move as much debt to that new card as you can, starting with the highest interest card first. If you can't get another card with lower interest, you can call the credit card company and see if they will lower the interest.
Start taking as much money as you can, and you will have to make sacrifices, and pay that amount of money to the highest interest credit card that you have. If you have money in savings, use that. You may be making 6% on your savings (if you are lucky), but you are paying much more in interest. That interest is negative equity and doesn't make sense. The only people getting rich are the banks. There's a reason the lights are on at the bank!
Cut up all of your cards except one. You may want to keep one card for emergencies, but only use it if you are S.O.L.
Pay the minimum amount on the lower interest cards, while you pile on as much money on the highest interest credit card. You will start to notice a snowball effect. As you pay off each card, you will find that you will have even more money to pay on each card. Use that extra money on the next debt. If you get a bonus at work, money for your birthday, or even at Holidays, put it towards your debt! Every bit helps.
It may take as long as four years, depending on how much debt you have. The freedom that you gain by getting out of debt is a wonderful thing. You will have more money than you ever had.
As you pay off each card, close the account so you don't rack it up again.
