Paying Off Credit Card Debt

The upside of this recession? (And yes, there is one.) We just might be ending our crazy love-fest with credit cards. Before the banks tanked, we all acted like toddlers with bubbles when it came to credit: "More! More! Yaaaay!" And we relied heavily on plastic to pay our way.

Well, the downside to this love affair is debt. Credit card debt is bad debt. It costs too much to have with little to show for it. What's more, you become shackled to credit card companies. And because they're losing money, they change our terms and raise our rates willy-nilly. So how do you stop this vicious cycle? Pay off your credit card debt.

Here's the most efficient plan to paying down your credit card debt:

• Throw as much money as possible at the highest-rate card while you continue to pay the minimums on everything else.
  
  
• When that card is paid off, throw all the money you've been paying toward it to the card with the next-highest interest rate, and so on and so on.
  
  
• If you need help with the numbers and figuring out what's what, head to Dinkytown.net for a free calculator. Whether you're trying to consolidate loans or get rid of credit card debt, just plug in your numbers and you'll get a customized payoff plan, for free.
  

The takeaway: Think of your credit card with the highest rate as the fastest growing weed in your yard: That card's debt grows faster than all the others and costs you more. So the sooner you get rid of that weed, the greener your lawn, so to speak.

Let's do it!

My questions to you: How are you paying off your credit cards now? Do you throw money at them with no real plan or are you just paying the minimums?

Check out the other challenges:

• Challenge 1: List your money hang-ups
• Challenge 2: Collect loose change
• Challenge 3: Get receipt savvy
• Challenge 4: List needs vs. wants
• Challenge 5: Start a conversation with your partner
• Challenge 6: Get the skinny on your credit cards
• Challenge 7: Lower your phone, cable, and Internet bill
• Challenge 8: Clip coupons
• Challenge 9: Create a budget
• Expert Advice: Finding travel deals
• Challenge 10: Set up automatic savings
• Challenge 11: Start thinking about retirement
• Expert Advice: The basics of investing
• Challenge 12: Lower your grocery bill
• Expert Advice: Saving for your kid's education
• Challenge 13: Check your credit report
• Expert Advice: Protecting your identity
• Challenge 14: Research health insurance
• Challenge 15: Lower your gas/electric bill
• Challenge 16: Check your car's health
• Expert Advice: Saving money on gas
• Challenge 17: Host a swap party!
• Wrap-up: Planning a financially fit future