Decision 1 – Are You Going to Continue Using Your Credit Cards While You Pay Them Down?
The first decision is whether to use your credit cards while you’re paying them off. My advice is don’t! I know that’s a tough thing to ask when it’s easy, convenient, and available. But you need to make a decision on whether you want easy / convenient / available or you want it paid off. You can’t have both. My recommendation is to put it away someplace safe. Consider putting your credit card in a plastic bag, filling it with water and then freezing it. If you “need” to use it, you’ll have to wait for it to thaw because microwaving it will create a light show that your neighbours won’t want. You can also lock it up, or give it to someone you trust for safe keeping.
Decision 2 – Where Will the Money Come From to Pay Off the Debt?
The second decision you need to make is where the money will come from to pay off your credit card. Will you earn extra income to pay it off? Will you reduce some expenses and use that extra money for payments? Will you sell something? Regardless of where the money comes from, know how much you can put towards your payment on a monthly basis.
Related: MyMoneyCoach.ca has a great list of 10 places to find money for whatever you need it for. Check out their list and see if you can find some money to pay off your credit cards faster.
Decision 3 – Why Are You Doing This?
And the third, which I think is the most important to helping you stay the course, is why you’re doing it. You need to become crystal clear why you want to pay off your credit cards so that you follow through, pay them off and keep them paid off. Instead of focusing on the negative, what you don’t want like stress, high payments, etc., focus on the positive, on what you do actually want. Some examples could include: I want to pay off my debt so I can feel peaceful around money and credit; I want to become debt free so I can travel, save for a home, my children’s education.