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One of the biggest problems in the US is credit card debt. The interest rate on a credit card balance is usually between 10-30% APR. Fortunately, there’s an easy 7-step process that can be used to get out of it. First, make a list of all your cards, along with your outstanding balance, interest rate and minimum payment. Next, order the cards from the highest to the lowest by interest rate. After that, you need to total your minimum payments. Then, examine your monthly budget and see how much extra money is left over. Next you need to pay the minimum on each card except for the one with the highest interest rate- whatever money you came up with in the previous step is applied to that card. Continue this until the card with the highest interest is finally paid off, and then move onto the next highest. Finally, continue with these steps until you have paid off all your cards.

Now, why does this method work? To understand, you need to know about minimum payments. Those payments are a percentage of your outstanding balance. This means that as your balance decreases, so does the payment. With the stated method, it pays off the cards by stabilizing your monthly payment, regardless of your balance.

While this method works, there’s a few different ways to make it work faster. The first thing you need to do is ask about getting your rate lowered. It costs nothing, and the worst thing that can happen is you could get declined. Also, remember to balance transfers, and keep in mind that the process to paying off your debt will still take time. There’s no cure-all for credit card debt, and there never will be. However, by following these steps, you can turn what would take up to ten years, into ten months.

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Avoiding Credit Card Debt

In order to avoid credit card debt you need to manage your finances. First of all,you need to calculate your monthly income and essential expenses. After that,

add five to ten percent of your income to set aside for emergencies and necessary savings. Basically, the goal is to save up enough money so you can stay away from credit card debt. If you need help trying to keep track of your money, you can always get budget counseling service.

If you have to get a credit card, make sure you pick out the right one. Get a credit card that has little fees and a low interest rate, and always be sure to read the fine print to learn how to earn rewards. You also need to learn how long of a grace period you have.

Another good piece of advice is not to spend more money than what you have. Also remember to pay the balance in full. When you pay before the actual date, you will end up saving money on interest. This is because any interest you pay is calculated based on average daily balance.

Also remember to use your credit card like cash. Be in control of your credit card. Be careful to remember that cash advances come with a much higher interest rate, fee, and no grace period. The moment you take a cash advance, you start paying interest on that balance. Even if you pay the entire balance in full each month, you will still have to pay interest.

Credit card advertising companies are targeting children of younger ages. The availability of credit cards has caused the increase in credit card debt problems: since 1960’s (when credit cards became more available to the average consumer) the availability of credit cards has spiked and today’s consumers now view 300-400 advertisements a day. The age number continues to drop, so it's imperative that we teach children about credit cards, and also what can happen when they're used improperly.

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Credit card debt is a major problem in this country. While not everyone has a credit card, those that do typically carry a balance. The interest rate on a credit card balance is usually between 10-30% APR. These high interest rates make it difficult for people to pay down their debt -- especially if only making the minimum payment. In fact, just making minimum payments can make even the smallest balance over a decade to pay off and thousands of dollars in finance charges.

It's no wonder getting out of debt seems so hard.

Fortunately, you can get out of debt. If you follow a few basic steps and put a plan in place, you can work to pay off your debt sooner, with less interest, and improve your credit score in the process.

1. First, list each of your credit cards. You'll want to include the outstanding balance, interest rate, and minimum payment. This information can easily be found on your last monthly statement.

2. Order the cards on the list so that the credit card with the highest interest rate is at the top, and the lowest is at the bottom.

3. Total the minimum payments. The total monthly minimum is your absolute lowest monthly payment, but remember, we want to pay more than the minimum in order to repay the debt quickly. So, take a look at your budget and see how much extra you can come up with each month in addition to the minimum. Whether it's an extra $20 a month or $100, every little bit helps.

4. As your payments come due, pay the minimum on each card except for the one at the top of your list. Remember, that one has the highest interest rate and it costing you the most money by maintaining a balance. So whatever additional money you budgeted in the previous step, apply that to that card.

5. Continue this process until the first card is paid off. When that card is paid off, continue with the minimum payments on the other cards, but now take the amount you were paying on the first card in addition to the minimum payment and apply it to the second card on your list.

6. Repeat this process until all cards are paid off.

Why This Works

To understand why a relatively simple process works it's important to understand how minimum payments work. Minimum payments are calculated as a percentage of the outstanding balance. That means as your card balance slowly decreases, so does your minimum payment. This is why it can take ten years or more to pay off even a small balance if you only make the minimum payment each month.

With this system, your monthly payment is remaining constant regardless of your balance. So each month your required minimum payment may go down, but you're ignoring that and by doing so you apply more and more money to your principal as time goes on, thus accelerating your debt repayment.

Starting with the highest interest rate ensures you're targeting the most costly credit up front to minimize the total amount of interest you pay.

A Few More Tips

While this payment strategy will help you get out of debt, you can potentially make things go even faster with a few other tips.

First, call your credit card company and ask about getting your rate lowered. This won't always work, but if you have been on time with your payments and a decent credit score, they may be willing to work with you. It doesn't hurt to try and it doesn't cost anything. The worst they can do is say no.

Don't forget about balance transfers. Again, it isn't always easy to get credit and the balance transfer deal may not be the best, but if you can find a way to transfer the balance from a card with a 25% APR to a card with an 18% APR, that's still something. There may be some special 0% offers as well, but they are harder to come by these days and the hidden fees may outweigh the benefit.

Finally, keep in mind that this process still takes time. There is no magic method of paying off debt, so realize that it will still take months or even a few years to become completely debt-free.

But what we're doing is putting a process in place to make sure that you can get out of debt as soon as possible. You can speed up the process if you continue to pay even more money towards your debt as your budget allows.

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Credit card debt is a major problem in this country. While not everyone has a credit card, those that do typically carry a balance. The interest rate on a credit card balance is usually between 10-30% APR. These high interest rates make it difficult for people to pay down their debt -- especially if only making the minimum payment.

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Credit Card Debt Help from CardRatings.com

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Credit Card Debt Help from CardRatings.com. Information on debt relief, settlement, consolidation and other options from our experts.