Playing Instructions

Now that you have your lower interest cards, look at the total balance on each card. You'll need to pay at least the minimum on each card, but you'll want to pick one card that you pay more on every month. The more the better. Here are your options for choosing that card:

• You could pay more on the card with the highest balance.
• You could pay more on the card with the highest interest rate.
• You could pay more on the card with the lowest balance.

None of them are bad options, and people have differing opinions on why one may be better than another. If your interest rates are all very similar I would suggest paying on the lowest balance card. Why? Because you have the best chance of clearing that balance the fastest since it's the smallest one. You need to have that euphoric sense of success when that card is completely paid off. There's nothing quite like the feeling of paying off a nagging credit card bill. It gives you the power you need to keep going on getting rid of your debt. You need to see that success quickly to keep you motivated.

Pay absolutely as much as you can on the card you choose. Pay only the minimum payment on all the other cards. For example:

• Card 1: $3000 balance, $20 minimum payment (pay $20 a month)
• Card 2: $4000 balance, $30 minimum payment (pay $30 a month)
• Card 3: $1000 balance, $10 minimum payment (pay $250 a month)

See, by paying $250 a month on card 3, that card will be completely paid off in 4 months. If you're wondering how you're going to pay so much more on your cards, see the page we have on budgeting.

Okay, now you've paid off card 3, now what? Celebrate! Go out for dinner, a movie, something reasonable. Not a big expensive meal, just something to celebrate and acknowledge your big accomplishment. However, you do NOT go out and spend a big bunch of money racking up more debt. That $250 you no longer pay on that card has a very specific purpose. You are going to apply it to your next credit card.

• Card 1: $2920 balance, $20 minimum payment (pay $20 + $250 a month = $270 a month)
• Card 2: $3880 balance, $30 minimum payment (pay $30 a month)

You're still paying the same amount each month on your total debt, but now you've only got 2 cards and you're going to make big chunks of progress on card #1. That $2920 balance will be cleared in about a year (assuming a very low interest rate). The balance isn't $3000 because you were still making payments during that 1st 4 months. Remember that during all this payoff time period you are NOT putting any new charges on any of these cards. You are living within your means and sticking to your budget. (see budgeting page) Once credit card #1 is paid off, celebrate again. If you want, you can have a celebration mid payoff (at 6 months time) to help solidify your goals and reward your efforts. But don't celebrate too often or you'll defeat the purpose.

• Card 2: $3520 balance, $30 minimum payment (pay $30 + $270 a month = $300 a month)

Since you were still paying the minimum on card #2 it's now down to $3520 and you're going to start paying your full budgeted amount of $300 on that card until it's cleared. $3520 should take another 12 months to pay off.

CONGRATULATIONS! If you followed this plan you would have paid off $8000 in credit card debt in only 2 yrs 4 months. If you allotted more than $300 a month toward these debts you would have paid it off even faster. The speed is up to you. Having your cards at 0% interest means that EVERY PENNY you pay on those cards goes toward the balance and none of it goes to the pocket of the credit card company. Getting as much of your money on the 0% interest rate is a big time goal and accomplishment.

Now, unless you were lucky enough to get your 0% rate for an unlimited amount of time (this is actually offered by some companies depending on your credit rating and your payment habits)... your 0% rate could have run out on one or more cards while you were paying them off. PAY ATTENTION to those term limits. If the card company won't extend your 0% rate, then you MUST transfer the remaining balance to a card that IS offering a 0% rate.

When we were paying off our cards I transferred balances every 12 months (starting the transfer 1 month before the 0% term ended) so that I was always paying 0%. I think I moved money through 5 different credit cards but I never paid a dime of interest during that time. That was a critical piece that allowed us to pay off so much so fast. With nothing going toward interest I was taking big chunks out of my debt each month. I actually got so excited about seeing those balances fall I couldn't wait to get the next credit card bill to see that lower balance and know I was making progress.

That feeling of being in control over your debt and WINNING THE CREDIT CARD GAME is very powerful.