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Debt Consolidation Facts

1. If you spend more than 50% of your credit limit every month, this indicates to the Credit Bureau that you do NOT have enough cash on hand to meet your monthly expenses. This will identify you as a high credit risk and will actually reduce your credit score by 60 - 70 points overnight (Fair Isaac).

2. If you miss 1 or 2 payments on your credit card debt, the issuing company will skyrocket your interest rate to a whopping 27% - 30%!

3. Out of a random sample of 3 million American consumers (included in Experian's National Score Index), 51% of them have at least 2 credit cards and 14% of them have 10 or more credit cards.

Fastest Way to Eliminate Credit Card Debt - No It's Not Debt Consolidation

The fastest way for you to eliminate credit card debt is to eliminate the big profit generator for credit card companies, and that is, late credit card payment fees and over-the-limit fees. Yes that's right, did you know that in the fiscal year 2006, 31% of the the credit card industry's profits or operating income came from late payment fees and over-the-limit credit card fees? Are you part of an average American family? Then you probably possess $8000 worth of credit card debt and guess what? If you make only the minimum monthly payments required on the debt, it will take you a whopping 30 years to pay off only $8000 worth of credit card debt! What's more, you will end up paying more than $22,000 in interest rate charges.

The fastest way for you to eliminate credit card debt is to increase your minimum monthly payments and make sure you do not have any late payments. Here are 3 simple steps that will help you eliminate credit card debt very fast:

1) No New Debt

Do not rack up any new debt on your credit cards, period! Hide your credit cards in a safe place which is not easily accessible. Integrate this simple mathematical equation into your life:

I Will Purchase Something on my Credit Card -> "ONLY IF" ->
I Have Enough Cash to Pay For It!


2) Set Your Mind

Post this message in your bathroom or your bedroom:

By cutting down our unnecessary expenses, we will raise enough cash to pay off our debts in ____ months instead of the original ____ months. The $____ we save in Interest Charges will be put into our Savings account so that we can raise enough money for down payment on a house, and live the American dream as opposed to renting!

Use our Debt Pay Off Goal calculator to see by how much you need to increase your monthly payments towards a particular debt, in order to pay off that debt at a specified future point in time.

3) Debt Payments Worksheet

Here is a sample Debt Repayment Schedule that you can use. It is also self-explanatory.

Type of Debt
Balance Due
Interest Rate
Current Monthly Payment
Additional Payments
i) Walmart $400 21% $72 $128
Between January 1st, 2006 - Feb 28th 2007, you will make an additional $128 per month payment towards your Walmart Credit Card and pay it off in 2 months. By tightening your budget and cutting down on unnecessary expenses, you will get rid of your Walmart Credit Card debt in 2 months! You will then use the freed up $72/month to pay off your next debt, the Sears debt.
ii) Sears $600 20% $60 $72
By combining the current $60/month debt payment with the $72/month extra payment saved from Debt #1 (the Walmart Debt), you will be able to pay off the Sears debt in ($600 / $132) roughly 4.5 months! Upon then, you will have an extra $132 per month to pay off your next debt, the Wells Fargo Debt.
iii) Wells Fargo $1500 18% $120 $132
By combining the current $120/month debt payment with the $132/month extra payment saved from Debt #2 (the Sears Debt), you will be able to pay off the Wells Fargo debt in ($1500/ $252) roughly 6 months! Upon then, you will have an extra $252 per month to pay off your next debt, your Federal Student Loan.
iv) Federal Student Loan $3000 12% $100 $252
By combining the current $100/month debt payment with the $252/month extra payment saved from Debt #3 (the Wells Fargo Debt), you will be able to pay off your Federal Student Loan in ($3000/ $352) roughly 9 months! Upon then, you will have an extra $352 per month disposable income!

Use our sample debt repayment schedule above to enter in the following characteristics:

  • Balance Due
  • Interest Rate Charged
  • Current Monthly Payment
  • Additional monthly payments you can make (after careful budgeting and cutting down on expenses)

Rank your debts according to their relative interest rates. The debt with the highest interest rate is #1, the debt with the 2nd highest interest rate is #2, and so on. Make additional payments one debt at a time (debts with the highest APR charged). Trust me, this is the fastest way to eliminate credit card debt and you shall be happy with the results!

You are in to reduce your debts aren't you? Check out our related article on the 10 crucial debt reduction mistakes.