Credit card is one of the factors that could contribute to bankruptcy. A lot of people have credit cards and most of them have a balance. The interest rate on a credit card balance is usually somewhere between 10 to 30 percent annual percentage rate.

The high interest rates prevent people from paying off their debts easily, particularly if they are only paying the minimum. The thing is, making minimum payments can take a person several years to pay off even a small balance. It will also cost a person a lot of money due to finance charges.

Luckily there is a way for a person to eliminate credit card debt just by formulating a plan and following a few simple steps. You can pay off your debt fast, with lower interest and even improve your credit score in the process. Here’s how:

First, make a list of all your credit cards. Make sure to the outstanding balance, interest rate and minimum payment of each one. You can refer to you latest monthly statement for this information.

List your cards in such a way that the card with the highest interest rate is at the top and the one with the lowest is at the bottom and then add the minimum payments. The sum is your lowest monthly payment. But you want to pay more than the minimum in order to eliminate you credit card debt faster. This is where your budget comes in. Determine how much extra you can come up with to add to your minimum payment.

On your next credit due date, pay the minimum on each credit card except for the topmost card on the list – the one with the highest interest rate. By maintaining a balance, this card is costing you a ton of money. Thus, whatever money you came up with when you assessed your budget, use that on this card.

Continue with this process until you have paid off one card. Once your first card is paid off continue paying the minimum on you other cards, but this time use the amount you were paying on the first card and apply it on another card on your list. Continue this process until you have eliminated all your credit card debt.