How to Consolidate Credit Card Debt and Eliminate Credit Card Debt

Getting out from under a mountain of credit card debt isn't an easy thing to do. Many people are able to consolidate credit card debt and eliminate credit card debt by putting together a financial plan.

You can do the same by putting together a realistic financial plan that tracks your monthly income and expenses.

Consolidating and eliminating credit card debt will be a long, hard process but it is possible with a little discipline and a plan. In the recent past you could refinance your mortgage to pay off credit card debt, but for most people that isn't an option anymore. Which actually is a good thing, because you're not eliminating your debt by refinancing your home, you're just shifting the debt.

To start the process, come up with a monthly budget that takes into account all of your spending. Track every single purchase for a month - even the little incidentals like that daily cup of coffee at Starbucks. You will be surprised to see how much these little purchases add up.

When you have put together a list of your monthly spending habits, see what can be eliminated without too much pain. The idea is to create a budget that you can live with that isn't too hard on yourself.  If you cut too much spending, you won't keep to the budget and you'll be back where you started. You can always decide to cut more later if you find the cuts you have already made aren't painful.

The money you have cut from spending should be applied towards your highest rate credit card. In fact, only pay the monthly minimum on the lower rate credit cards. Once you have paid off the highest rate credit card, start with the next highest rate card. You can use a credit card payoff calculator to see the savings benefit.

Other options beside cutting expenses to pay off credit card debt is to consolidate debt into a bank loan. Bank loan rates are lower than most credit card rates. Also, by consolidating debt into one loan with a lower interest rate, your monthly payments will be lower. The money you save with a lower monthly payment can be applied towards the loan or put into an emergency savings account. Having six months of expenses saved can tide you over in case of a job loss in the family.