How To Dig Yourself Out Of The Hole Of Debt?

Posted on Jul 29 2013 - 1:13pm by Marcelina Hardy


In just a few months, you’ve managed to get into so much debt that you’re unable to see a way out. You’ve thought about going into the witness protection program, but realistically, you know that would never solve your debt problems. So, instead, you have to face the facts. You’re going to have to find a way to pay off your credit cards. Digging yourself out of the hole of debt won’t be easy, but you can do it.

First Things First: Cut Them Up

You don’t need to put any more money on credit cards. The more you charge, the more you have to pay back. Cut your cards up, so you don’t feel tempted to use them.

Start Budgeting

If you continue to live beyond your means, you’ll never be able to pay enough towards credit cards. Take your income and subtract your living expenses from it. All the money that’s left should go towards your debt. If you don’t have enough money left over for your debt, it may be time to get a second job.

Make Sacrifices

You may not be able to go out to dinner every night. You may not be able to buy new clothes every week. You may have to switch from Starbucks to K-Cups. Making sacrifices is what happens when you splurge for months. Splurging then means no splurging now. Don’t worry, it’s temporary. Once you’ve paid off your debt, you can start to treat yourself again, but with much more control.

Ask for Lower Interest Rates

Interest rates make it difficult to pay back a credit card because you end up wasting most of your payment on the interest rather than the principal. To help decrease the amount you owe in interest, ask the credit card company to lower it for you. Sometimes, they run specials, and they can reduce it by as much as a couple percentages. That may not seem like much, but over time, it could end up saving you hundreds of dollars.

Negotiate a Settlement Amount

Debt consolidators use this trick all of the time to reduce a person’s debt as much as possible. You can do it too. Call the credit card company and tell them about your financial situation. Let them know how you will be trying to pay off your debt. Finally, ask them for a settlement amount upon closing your account. The credit card company is sometimes willing to waive overage charges and late fees, as long as you close your account and show you are committed to paying off your debt.

Be Consistent

Sending in a large payment one month and then a small one the next month won’t help you pay off your card. You must be consistent with the large payments to make a dent in the debt. If you can’t send in a large payment each money, then you did your best. Keeping money to the side for something fun instead of paying off your debt is not doing your best though.

Treat Yourself in Other Ways

You don’t have to spend a lot of money to treat yourself. Find low cost ways to do it, so you don’t feel as deprived. This will make it easier for you to stick to your budget and pay off your card as quickly as possible.

Photo Credit: Flickr/Images Money

About the Author

Marcelina Hardy wrote this post. She often writes on topics having to do with a debt management plan and debt calculator.