Make Wealth Flow Towards You!

How to make money run after you (Part 7)

Posted by on Jan 27, 2012 in Money Management | 18 comments

“How To Remove Credit Card Debt Fast”

Do you have what seems to be unmanageable credit card debt? Are you already swearing to cut it up as soon as you pay it off and never use another credit card in your life ever again?

Well, if you are suffering from Credit Card debt in whatever way, shape or form, know that I used to have credit card nightmares too. You see, I used to have very unhealthy habits with credit cards, I used to max it out, pay only the minimum, sometimes even missing the due date. Needless to say, I learned the hard way, that if you don’t pay attention to your credit card debt, it will eat you up alive!

But you see, credit cards are not at all evil, unless you treat it without respect of course. Today, my relationship with my credit cards are extremely cash flow positive but it took me a while, with the loving support of my wife, to figure out how to properly use them. In fact, if you use it the way I do, it can actually be the very thing that will make you wealthier than you can imagine.

How to get out of Credit Card Debt Fast

But before it can be used to create wealth, it must first be managed and controlled. So let’s talk about how to get out of credit card debt fast. Here is the step by step guide of how to do that.

Identify and stop the “useless expenses”:

1.)   Remove any kind of “insurance” that you have automatically billed to your credit card. These are killer expenses. Examples are card debt protection, you pay a few hundred pesos a month so that if you die, your credit card debt is automatically paid for. Another is life insurance on credit cards, the premium you are paying for these are extremely expensive, cancel them immediately. If you want to get insured, make an appointment with a reputable insurance company and ask for a reasonable plan, I assure you it will be a lot cheaper plus you will remove a few hundreds if not thousands of your monthly credit card bill.

2.)   Stop using your card for luxury expenses that you cannot afford to pay in full – Sometimes, you want this shiny new toy that you just have to have for yourself (or to give your wife/husband) but you cannot afford it in the first place. STOP. Because if you cannot afford it and it is not used to generate additional income for you, when your credit card bill comes, you know what will happen right? Yes, you will only start paying for the minimum amount which is laced with an exorbitant interest add on rate of at least 3.5% / month compounded. So, Mark, how can I buy those shiny new toys then? Simple, do not buy them.

Consolidate and come up with the cash to pay off your debt

1.)   If you have more than one credit card. Look for the one with the lowest interest, and with the most attractive “balance transfer” promo among all of them and transfer the balance of the other cards there one at a time or all at once (assuming the balance of the card can handle it). The goal is to stop using the other cards one at a time until you are only paying for one card.

2.)   If you have savings, use it to pay off your credit card debt in full. Your savings is better used to pay off your credit card debt rather than sitting in a savings account or time deposit generating 1% interest a year compared to paying credit card debt of 3.5%+ / month!

3.)   Create additional cash by selling whatever you have that is worth selling and still has value. Sell your old clothes; sell your old gadgets, books, furniture that you no longer use (much). If you have a skill or talent, then learn to sell that skill or talent to create even more cash to pay off your credit card debt. I talk about these in my past article: “Money Management Simplified Part 3”

Once you pay off your Credit card debt in full, congratulations, you will be ready to read my next article where I talk about how to use your credit card with zero interest, minimize your monthly cash flow expenses and get loans without collateral at minimal interest.

Now, if you are serious about removing your credit card debt and learn how to use it to create wealth then here are your assignments:

  1. Comment on this article, tell me why these methods won’t work for you or tell me if you (and your spouse) have started doing these already.
  2. Let your husband or wife read this article and comment on it as well.

Good luck and see you in the next article!

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18 Comments

Join the conversation and post a comment.

  1. richard c viador

    hi,
    sir mark, thank you from this wonderful article.actually it’s my first time to use a credit card i thought i have the courage to use it well but as time goes buy it becomes a habit until i realized that i was in debt in paying this credit card now.i stop using it right now and start to pay it little by little.sir mark thank you again.God bless!

  2. Kaleigh Gamma

    I like this post, enjoyed this one regards for posting .

  3. Dennis

    Hi Mark,

    So far , I think I am able to handle my credit card bills well. I am able to pay the monthly bills in full. I don’t avail of the insurance credit card companies offer as well as the pre-approved loans. However, what I still need to do is to refrain using the card for things (non-essentials) I cannot pay in full. I’m guilty of avail ing the 0% interest promos.

    I’m really interested on how to use the ‘plastic’ to generate wealth.

    Thanks.

    • markso

      Hi Dennis, non-essentials are killers, but sometimes a little indulgence can do wonders for your psychological need for reward, just don’t over do it. With regards to 0% interest promos, unless there is a significant discount from paying for something in full versus getting a 0% interest Promo, then what you are doing is fine

        IF

      you really need the item that is i.e. Refrigerator, stove, or the essentials. In fact doing it with 0% makes a lot of sense as it stretches your funds.

  4. valentin de la cruz

    i only use my credit card just after the cutoff date just like you said and limited only to good expense good advise i was able to strectch a bit my budget thanks

  5. Rai-za

    Thank you for this article..lately i was hooked with credit card insurance..my husband told me that i should cut it off but i did not pay attenttion until i read this…

  6. anna

    hi mark..

    as of now im doing this as part of my daily routines.. to check and save.. having a big dept is really a headache.. thats why i manage to have discipline..

  7. Djoanna

    TOTALLY AGREE!
    I am however also guilty of availing 0% interest promos as I recently moved out of my parent’s place. I also use accumulated rewards points to purchase stuff I needed.

  8. bheng

    yes sir mark my husband and i already talked about these things and also i already started selling my stuff that i dont use to provide extra cash to save.

  9. Angelina Cuenza

    Hi sir Mark. I have not yet into credit card. There are things on market that are offering discount thru the use of credit card. how true is this?

  10. Ruel A.

    What I usually did is I pay my credit card thru my savings account. So far I don’t have any trouble in my credit card. I prepare myself that the moment I have my card, I will never, never used my card on something that is not actually important or need. I have to discipline myself in all my expenses.

  11. Ricky

    I agree with you mark. don’t treat credit cards as cash but rather as credit. I only use credit cards for online transactions and an excuse for not carrying cash in that way I reduce spending because cash is not readily available.

  12. buddy oberas

    I am happy Mark, you reinforced our goal of only using the credit card that has the lowest interest and not so “inviting” for purchase. Me and my wife have also learned the lesson from those credit cards , the hard way. Thanks for this article. Bless you more.

  13. Grace

    But Mark, my teacher told us to keep on making credits to increase our credit “something”. It’s like when you have loans, you can easily loan again..

  14. Gilbert Z. Apostol

    Hi Sir Mark, I am confident that at present I have control over my credit card use. I make sure to pay it in full whenever I have cash, and I don’t use it on unnecessary shopping. I am looking forward to learn from you how I can use my credit card with zero interest, minimize my monthly cash flow expenses and get loans without collateral at minimal interest. Thank you and more power!

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