Tips and advice on how to pay credit card debt off

Tip #1: Stop spending!

It's obvious but surprisingly many people don't give this simple idea a fair chance. You can't spend yourself out of debt. You have to really get it on the deep level. There are some expenses you have to make: mortgage or rent, credit card and other loan payments, utility bills, food and medicine. But you, most likely, could live without eating out, supporting Starbucks empire, buying new clothes, iPhones and all the other crap. You'll be surprised how much more money will suddenly appear in your bank account as a result of these cuts.

So the first step to debt-free life and financial freedom is: stop spending!

Tip #2: Refinance or pay off highest interest debt first

I don't care what it takes, but you have to deal with all high interest debt ASAP. Otherwise, those high APRs are taking away your hard earned money. If you can, get the lowest interest credit card you can (preferably 0%-4% APR) and transfer highest interest debt into it. If you can't do it, cut spending drastically, save money and pay off highest interest cards.

Ideally, you should only have low interest debt - no more then 4% APR.

Tip #3: If two cards have the same APR, pay off the one with smaller balance first

You always pay off highest APR credit card (or any loan) first. Period. If two cards have the same APR and it's the highest APR cards you have, deal with the one with smaller balance first. This has two advantages: it boosts your credit score, because you have fewer accounts with balances (credit agencies value it a lot) and it has psychological value of proving yourself that paying credit card debt could be done.

Tip #4: Let your 401K help you with your debt

Some people hate the idea of touching 401K money. But I see no reason of suffering huge financial losses paying high interest on credit cards and other loans for the sake of good but not set in stone financial rule. I'm not advocating pulling money out of 401K account - this is a really bad idea.

Instead, you should get a loan from financial institution holding your 401K. You'll pay interest on that loan to YOURSELF since you are borrowing your own money. Use the money you've got to pay any high interest debt. After you are back on your feet, pay your loan back on 401K.