Step Four to getting Rid of Debt
Now that I have told you about the first three steps I took towards getting rid of my debt it is time to move on to Step Four, which is to Manage the Credit Cards. Remember that:
Step One to Getting Rid of Debt was to List all of the Debt.
Step Two to Getting Rid of Debt was to Make a Plan.
Step Three to Getting Rid of Debt was to make a Budget.
I had the first three steps down and then I moved on to managing the credit cards. When dealing with my credit cards there were some things that needed to be taken care of up front.
Reduce Interest Rates
Manage Snowball
Pay Cards on Time
The above list is the mini steps I took as part of the process of managing the credit cards.
Reduce Interest Rates
You may have heard many different stories about the degrees of success that people have had with getting the credit card companies to 
reduce their interest rates. My experiences have varied and in some cases I got the rates dropped, in some cases I got the rate dropped twice. In other cases I was not able to get the rate dropped. The thing is that you just never know what will happen until you try.
Some people say you should follow a script to get your rate dropped because they have gotten these scripts from people who worked in the credit card industry. I did not follow any prewritten script. I simply called all the card companies and asked them to reduce my rates. If they agreed to reduce the rate then I was happy. If they did not reduce the rate then I called back about two months later and tried again.
Manage Snowball
I had to take note of the order that I was going to pay my credit cards in. I chose the smallest balance method of the debt snowball because I thought it would be easier for me to work that way. By paying off the balance that was the lowest amount I would get the psychological benefit of seeing a debt go to zero in a definable amount of time.
Now some people may say that it makes more sense to pay off the card with the highest interest rate first so that you will end up paying less in interest. I chose the lowest balance method because the card with the highest interest rate has a very large balance and it felt like I would never be done. I did manage to pay off one debt completely so I was then able to apply that money to paying off the debt with the next highest balance.
Pay Cards on Time
In order to make everything that I just talked about work properly I still needed to do one very important thing. I needed to make sure that I paid my cards on time, regardless of whether I was just paying the minimum or a great deal more. I actually pay about $5 more than the minimum on the ‘minimum payment’ cards and then drop large chunks on the ’snowball target’.
Little by little the payments were adding up and going towards reducing the balances on the cards. I still have a long way to go but I have been proud of the progress that I have made. I have all of the payments set up through my automatic online bill pay so that I do not have to worry about writing checks every time a payment is due. I still check my paper statements periodically and also log in online to see if anything has changed or needs to be updated.
Please take the time to read Step One to Getting Rid of Debt , Step Two to Getting Rid of Debt and Step Three to Getting Rid of Debt.
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- Biting the Bullet
- The DOLP Snowball method to pay off Credit Cards
- Snowballing debt
- Step Two to getting rid of Debt
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