I put the cards through the shredder. Every one of them. I’m hanging onto the chips for an art project. Mobile, mosaic, jewelry, I’m not sure yet, but the inspiration will come. Just do it. If you have to have one for emergencies, put it in a Ziploc bag full of water in the freezer. You won’t be able to thaw it quickly or the card will be damaged. Get out all of your statements and use a debt calculator to figure out how to get out. We were paying highest interest accounts first for a long time, but not seeing a big difference. Recently we switched to the snowball effect and WOW is that satisfying. We outright paid off some smaller loans in full (with cash, not credit) and that feels good. Now we have that extra $100 or $200 a month to payoff some bigger balances. We’re also getting aggressive about using any idle money we can, right down to change buckets, and checking the sofa cushions. Found $33 this way last month! Is your mortgage interest rate high? You might want to shop around—rates are way down. Take a look at Smarthippo.com. I’m thinking about doing this but haven’t taken the plunge yet as we think we may sell our condo for something bigger.
The bottom line: to creditors any paying is good paying right now. Try to get them to drop your interest rates, and pay as much as you can every single month. I sit down to write the check every month and challenge myself to pay 10% more than I had planned. Every rebate check or babysitting dollar you get, throw it at those debts. I’ll bet the credit card companies hate me. Every time I deposit anything “extra” to my bank account, I write a check back to the credit card company for the same amount. They get a half dozen checks in the mail every month.
You’ll be surprised at how fast it goes down, especially if you have your net worth on Mint. If you check your Mint.com page every day, your fingers are on the pulse of your finances and you feel compelled to tackle those debts. I sure have and it’s working great for us. We’ve turned around our finances so much that we’ve moved our expected debt free date up by more than 18 months.
Good luck—and please, let me know how it works for you!