Paying off your credit card….once and for all!!

April 12, 2012

From my last post you have seen I recommend that, unless you pay your cards off in full each and every month, you use debit cards.

Now that’s all very fine but, what if you already have a credit card, or cards, which have balances on them which you can’t pay off in full. What do you do then?

The first thing I recommend is,  stop using your credit cards immediately. There is a saying which is very pertinent here:

” If you want to get yourself out of a hole, first you have to stop digging”.

In other words, you can’t hope to get your credit cards paid off, whilst you are still using them and increasing your debt. Once you stop using them, the amount you pay off them then actually starts to make a difference. How you go about paying them off was the topic of another post of mine Essentially I recommend that you pay the minimum off them, until you have savings that will cover all periodic expenses you have, or will have. As I say it is the subject of another post!

For those of you who are now saying ” This doesn’t help me, because I have to use my credit card just to buy my groceries or kids’ clothes”

OK, what I suggest for you is that at the beginning of each month, you sit down and draw up a spending plan for the month ahead. Now if you are really serious about paying off your credit card(s) for good, this plan should address all the real needs of your family, namely, shelter, food and essential clothing, but not include wants eg new flat screen TV etc!! Once you have this drawn up, if there is a gap between the money you bring in and the money required to fulfill those needs, that is the amount you may put on your credit card. This amount is planned, which is the key word. This does not mean that you can see a dress that you just love and buy it with your credit card. The dress is not a need, and it’s purchase is not planned. You would also benefit from seeking the assistance of a Financial Recovery℠ Counsellor. You will find a list of them here:-

Do you draw up a spending plan or budget at the beginning of every month? Do you stick to it? I’d love to hear your experiences.


2 Responses to “Paying off your credit card….once and for all!!”

  1. Carlos Says:

    Hi Jill, really I think it’s a problem in practice.
    Usually we earn money then spend it and then finally, and if anything left over, save. The problem is that almost never spare.
    What would happen if we alter this equation and earn the money, then save and the rest we spend it.
    For example 100% earn, 10-20% save, and 90-20% spend.
    What do you think?

    • Jill Porter Says:

      Thanks for your comment.

      It would make a great difference Carlos; sadly it doesn’t happen often enough. It should be part of “pay yourself first”; putting away at least part of your earnings, the more the better.
      Many of my clients are not in a position to do this, they have to pay off debt, and often struggle to make even the minimum payment on their credit cards. As soon as they are able it is exactly what I encourage them to do. How successful have you been at getting people to save first, then spend?

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