2008 was a rocky financial year for most everyone in this country. The decline of the real estate market and the credit crisis left many wondering what to do next. As consumers look to 2009, many are trying to regroup and figure out a plan for their financial futures. Some are shaken, but will weather the economic storm okay. Others have racked up debt on their credit cards and are seeking ways to reduce or erase that debt. It is estimated that the average number of credit cards per consumer in this country is four. Credit cards are a common way of making purchases. If utilized appropriately, they are a handy resource. On the other hand, credit cards offer an enticing path to spend beyond your means. Once debt is accumulated, it takes a disciplined routine to climb out of it.



The first step to reducing and eliminating debt on your credit cards is to stop making purchases on the cards. It may be common sense, but erasing debt while you are accruing more is not easy. Also, resist the urge to apply for new credit cards. Simply change your habits. Write checks, use cash or a bank card that automatically takes the amount from your account. Next, examine your budget to determine where you might be able to cut expenses. The most logical area of your budget in which to do this is discretionary items. Start taking your lunch to work, making your own coffee and get rid of unnecessary entertainment expenses. Take the money you save on those discretionary items and put it toward the balances on your credit cards. You may need to temporarily take on additional income opportunities, if you find that you have no discretionary expenses to reduce.

After you have a handle on your budget, develop a routine of slowly paying down the debt on your credit cards. Make more than the minimum payments on the monthly statements. When you make only the minimum payment, you are paying a significant amount of interest. If you pay more than the minimum, you will pay down more of the balance. Work on the card with the least amount of debt first, if you have debt on several credit cards. The emotional benefit of seeing some debt paid off will offer a reward and let you see the light at the end of the tunnel. Whenever you have extra money, make an extra payment on your credit cards. After you begin to eliminate the debt on your credit cards, cancel the most recent cards and keep the one you have had the longest. Having long established credit card accounts that are in good standing reflects positively on your credit score and credit report. Maintain your commitment to paying off your debt until the balances on all your credit cards have been paid. Always remind yourself of the dedication it took to pay down accrued debt, especially if and when you decide to use a card regularly again. Stay on top of your balances and use your card wisely. Remember that you will have to pay for everything you put on your credit cards.