If you and your credit cards went a little overboard in the
spirit of holiday giving, now is the time to buckle down and pay
off those debts before the interest has you feeling like the
Grinch.

Stop Using Credit Cards

“If you want to get out of debt, the first thing you have
to do is stop using credit,” said Michael Rupured, an
Extension
Service financial management specialist with the University of
Georgia College of Family and Consumer Sciences.

“If you must,” he said, “keep one card for
travel
and emergencies. But leave the card at home in a safe place until
you need it.”

Cut up all your other credit cards, he said. And close out
the accounts.

Make a List and Check Your
Rates

Next, make a list of all your debts, excluding your mortgage.
For each debt, write down how much you owe, the Annual Percentage
Rate (APR) and the minimum payment. Using this list, determine
the total you owe, how much you pay in interest each month and
how much goes for debt payments.

“If you’re behind or have a hard time making minimum
payments,
you may need help,” Rupured said. “Nonprofit credit
counseling agencies can help you develop a debt repayment plan
that fits your budget.” Check under “credit
counselors”
in the yellow pages of your phone book.

If you can afford minimum payments, you can get out of debt
without professional help.

Pay More to One Debt
First

“Make the minimum payment on all but one of your
debts,”
Rupured said. “Then put any extra dollars you can come up
with toward that one debt you excluded. Focus on the debt with
the highest APR to save the most on interest.”

Continue applying the same amount to debt payments every month
until all the debts are paid.

“As you pay one credit card or other debt off, add that
amount to your payment for another creditor,” he said.
“If
you have seven debts with a combined monthly minimum payment of
$725, continue to pay $725 until you have repaid all seven
debts.”

Rupured says increasing your monthly debt payment by $25 can
knock several months off your debt repayment time.

Use Extra Money Wisely

“Put tax refunds, bonuses, gifts or prizes toward your
debts to pay them off even faster,” he said. “With
fewer
bills to pay, you’ll have more money, write fewer checks and even
save on postage!”

For more help, ask your county Extension office about
information
on the PowerPay Credit Payment Worksheet. Once you complete the
PowerPay information form, you’ll get several printouts showing
a repayment schedule, how long it will take to pay off your debts
and how much you will pay in interest.