ELIMINATE YOUR CREDIT CARDS

The one trait a person should have when owning a credit card is discipline.  But that is easier said than done unless of course you know the trick.  And I'm going to tell you what it is because I want you to succeed.  We all know that if you charge a purchase on a credit card the ideal situation would be to pay that off the very next month so you don't suffer interest charges.  But how do you charge just enough that you are able to pay it off the next month.  It's easy to lose sight of the amount when it's not cash you are transacting with.  So what you have to do is pretend you are paying with cash, not a card.  You literally say to yourself, "could I afford this today if I had cash"? If the answer is no, don't charge it.  If what you need to purchase is an emergency -- and I'm a firm believer that is the only time you should use credit cards -- see if there is another way to get the money.  For instance, ask a family member for a loan or some other similar way.

Credit cards do have a purpose:

• If you have your own business, you may need a credit card.  Not to charge unlimited purchases but for recordkeeping.  Once again, pay them off each month.
• If you are trying to build good credit, having a credit card can do that, but first you must learn a couple of truths about this strategy.  First, I would have just one major credit card.  Having one card will help keep you inline.  Secondly, and most importantly, let's say you have a credit card with a $1000 limit and you charge $1000.  Just the fact that you maxed out your limit will harm your credit score.  That's right, credit bureaus reward you with good ratings when you only use about 50 percent of your limit.  Personally I wouldn't use that much because, remember, you want to pay it off next month.

But if you unfortunately are struggling with credit card bills, there is a plan for you to follow:

• First of all make a list of all of your credit cards, including balance and interest rate. Now list the minimum payment required on each one.

• Arrange the list so that the credit card with the highest interest rate is at the top and the one with the lowest interest rate is at the bottom.

• Add up the required minimum payments for all of your cards. Now compare the total monthly minimum to the total interest charged. You will find that they are pretty close. If you just pay the minimums you will be in debt for the rest of your life. This is the card's company's biggest secret. They want you to make purchases based on the rationale of "Can I afford the minimum payment?"

Take a long hard look at your finances and determine how much extra you can come up with each month to apply to your credit card debt. This is in addition to the minimum monthly payment. Look for ways to cut other expenses if necessary to come up with more money.

Once you have that amount, write it in big bold numbers at the top of your list. Do not change this amount! This is about discipline and getting out of debt.

• Call the credit card companies, starting with the one with the highest interest rate, and ask for a reduction in interest. Stress your good payment history and the fact that you have been a long time customer. You might even elude to the fact that you have received an offer from another card with a better interest rate and ask if they can top it. Whatever you do, always conduct yourself in a professional manner. Losing your cool will definitely get you nowhere.

• If the card companies refuse to lower their rates, shop around for a card with a lower interest rate. Transfer your highest interest rate balance to a lower interest rate card. Now redo your list with the new interest rates. But do not change that total amount set aside for payment.

• Each month, pay the minimum balance on all of your cards except the one with the highest interest rate. On this card, pay the minimum plus the additional amount that you have delegated to use for your card debt.

• Continue to do this until your card with the highest interest rate is paid off. This will take a little time, so be patient. Then take the amount that you were paying on the highest interest rate card and apply that amount to the second highest rate card. Once you get this plan rolling you will find yourself paying off the subsequent cards faster.

This plan of reducing your credit card debt has been proven to work time and time again. Don't let the credit card companies keep you in their prison any longer. Use this plan and free yourself from credit card debt forever.  You can do it!