Before we get into how to set up the right plan to get out of debt, we need to touch on one of the biggest mistakes people make when they need debt relief— they keep spending on credit cards while trying to pay them off.
A budget is essential in your quest to get out of debt, no matter which debt relief option you end up using. You need to get a budget in place—written out and not just in your head.
Gather up your most recent credit card statements or login into your apps to write down the following for each credit card: 1. Current balance 2. Current monthly payment 3. APR (interest rate) 4. Status of the account (current, behind, charged-off)
If you owe less than $5,000 total, then you may be able to get out of debt on your own just by making payments strategically. This is where your budget comes in because minimum payments aren’t going to help you get out of debt quickly. Instead, you need to put as much money as possible towards paying off one debt at a time.