How to Budget for Credit Cards

Paying the minimum on a credit card, especially if you continue to use the card, could require decades to pay off the obligation. If you're in the unfortunate position of having several large credit card bills, it's not the end of the world. If you create and closely follow a budget plan for paying off your credit cards, you could be rid of those pesky bills in no time flat.

Stop using your credit cards before establishing your budget to pay them off.

List all of your credit cards on a spreadsheet or piece of paper. Include the name of the creditor, balance due, minimum monthly payment and interest rate for each card.

Prioritize your credit cards in order of urgency. According to Howard S. Dvorkin, the president of a credit-counseling firm, it's important to pay off the debt with the highest interest rates first. So place those accounts at the top of the priority list then work your way down to the lowest rate.

Add up all the base expenses listed on your budget such as rent, groceries and electric bills including your minimum credit card payments. Deduct that total from your monthly take-home pay to determine how much money you have left over at the end of the month to put toward your new credit card budget. Plug that figure into your credit card budget spreadsheet.

Pay the excess money left over after paying your base expenses to the first credit card bill on your priority list each month. Use Bankrate's "What will it take to pay off my credit card?" calculator to determine how long it will take to pay off that credit card. Enter the number of months into your credit card budget.

Follow your budget until the first card is paid off. Place a check next to the credit card you've paid off on your budget, do a happy dance and pat yourself on the back because you did it. Cut up that credit card and do not use the account any more.

Pay the excess money left over each month toward the next credit card bill on your list. Repeat this action and update your credit card budget each time you pay off the balance until you're credit card debt free.


  • Cut other bills on your list of expenses to free up more cash to put toward your new credit card budget. Make sacrifices until your debt is gone.

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About the Author

Louise Balle has been writing Web articles since 2004, covering everything from business promotion to topics on beauty. Her work can be found on various websites. She has a small-business background and experience as a layout and graphics designer for Web and book projects.