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Credit Card Debt Elimination Plans

In today’s economic maelstrom, the demand for credit card debt elimination plans is unprecedented. Millions of credit card holders are having trouble paying off their credit card debts. You can join one of the many credit card debt elimination plans on the market, but if you have the self discipline to follow a plan,  you can very often do just as well or better on your own.

No doubt, like most people, you have a number of reasons for wanting to reduce your credit card debt. Maybe you have a desire to purchase a home in the near future and you realize that mortgage lenders give negative marks for being in major credit card debt. Or, if you are already a homeowner, you may simply want to reduce your monthly credit card payments so you have more disposable income. And since they removed the tax deductions for credit card interest, you can no longer look to the government to help paying credit card debt.

The simplest credit card debt elimination plan that you can conceive is to start a spending diary.

Studies have shown that aside from their major purchases, most people do not really keep track of what they spend money on. Sure, every month they write checks for their utility bills and normal living expenses, but they lose track of the small dollar amounts that disappear from their pocket books every day. The don’t categorize their day-to-day expenses, so they have no idea how much they could reduce their average credit card debt by cutting back on expenses.

So the first step to cutting back is to know what you are spending your money on. For one week, track everything you buy with cash, checks, credit cards, and debit cards. If you like to work with paper, get a small notebook you can carry with you at all times, and write down each item as you purchase it. Don’t wait until the end of the day to track your expenses; studies have shown that people underestimate their expenses when they try to remember what they purchased. This may seem burdensome, but it is not as much of a burden as the average credit card debt can be.

If you can’t be bothered with a notebook, use your cell phone to keep track of your expenses. If your cell plan offers free text messaging, send yourself a text message every time you buy something. At the end of the day, you can read your text messages and enter the information into a spreadsheet. If you can reduce your average credit card debt, all this record keeping will be well worth the effort.

After you have itemized one week’s worth of expenses, go over each item and ask yourself whether you really needed that item and, if you did, whether you could have purchased a less expensive alternative. You can reduce your average credit card debt by cutting back on those items that you can easily live without.

Beginning the process of eliminating your credit card debt is one of the most significant steps you can take towards retaking control of your financial life.

Credit card debt elimination plans can be complex or simple. However, the plans that have the greatest chance of being successful, tend to fall on the simplistic side.

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