Freeing Yourself from Excessive Credit Card Debt

When overspending turns the convenience of carrying a credit card into a debilitating cycle of budget-busting monthly payments, maxed-out credit lines, and damaged credit scores resulting from late or missed payments, you are living the very real nightmare of excessive credit card debt.

How much credit card debt is too much?

Approximately 115 million Americans carry monthly credit card debt. The trick to successfully managing your credit is to recognize how to draw the line between using credit cards as a helpful, credit-building tool, and over-using credit cards which can result in devastating personal financial liability.

Warning signs that you’re at risk for bad credit

There are basic warning signs that you could be at risk for serious credit problems. If any of these scenarios apply to you, it may be time to take a hard look at your financial situation and set up a plan to help you regain control of your budget.

• You use credit cards for daily expenses such as groceries and gas
• You can afford to pay only the minimum payment each month
• The balance is at your credit limit
• You’re considering a home equity loan to pay off credit cards
• You have little or no savings
• You spend more than you earn

How to recover from excessive credit card debt

The Federal Trade Commission offers guidelines to help you budget and negotiate your way out of credit card debt while re-establishing your damaged credit history. Begin by working out a plan to pay down your card balances starting with these simple tips:

• Get a clear understanding of your situation by making a list of all your cards including balance, amount due, and interest rate.


• Pay down your credit balances either by paying off cards with the highest interest rates first since they are costing you the most in interest or by paying off your cards with the lowest balances which will speed up the pay down process.


• As you pay off each card, add the amount of that card’s monthly payment to the amount you pay on the next card. Continue this with all of your cards and you’ll pay down your debt quickly.

By taking the first steps of recognizing and evaluating your credit debt problem, you will be on the road to regaining your financial freedom.