Paying off your credit cards getting out of debt

Paying off your credit cards, getting out of debt!

Everyone says they want to get out of debt.  How would you like to be debt free?  Most people want to end the dependancy on credit cards and payoff their credit cards. Going bankrupt is not an easy thing to do and it is even harder to do now days since the law changed last October.  Another problem is even if you do go bankrupt your creditors sell the bad debt to a collection agency for penny's on the dollar and they still come after you and hound you for the money.

I purchased John Cummuta's Transforming Debt Into Wealth program on CD. I believe it was a $36 program, I ended up selling on it eBay after I was done listening to it. It was well worth the money and the time to listen too. Her are some of the strategies in his book:

1. First of all cut up all your credit cards except the one with the lowest interest rate. Do not charge anything that you cannot payoff that month.  
2. The second step is to payoff the highest interest rate cards first.  This makes obvious sense but most people don't do this.
3. Pay the minimum amount on all cards except the one with the highest rate.
4. Pay as much as you possibly can on the card with the highest interest rate.
5. When this card is paid off switch to the next highest card.
6. If you continue to payoff cards the extra $20 or $50 per month from each paid off card needs to be rolled into the next card.  This will create a snowball effect that will help you pay of your debts even faster.
7. Continue to apply this strategy until all the credit cards are paid off.  Don't get discouraged it could take you years to accomplish this.
8. Remember: You need to stop incurring additional charges are your credit cards.  If you want to go out to a nice dinner, don't put is on the credit card.  If you are going to go on vacation make sure you can pay for it prior to going on the vacation.
9. After you have paid off the credit cards start the same process on the car payments, boats, toys, etc.
10. Apply the same strategy to your house.
    
    Remember: your life style may appear to most people that you are making the big bucks and living the high life. However, one definition of wealth is a math question, how many months can you and your family last on your current savings. If your annual expenses are $40,000 and you have $20K in the bank you can last 6 months. However, a lot of people are not even in this situation.
    

    The best way for you to change this ratio is for you to lower the monthly expenses by paying off the high interest credit cards and stop buying things on time. When you get to a stable point in your finances you should be able to setup your credit cards to pay them off automatically by withdraw from your checking account.