4 Easy Steps To Payoff Credit Card Debit

Dear reader,

After I lost my first business, rich dad said to me, “When your car is broken, you take it to trained professional mechanics and they fix your car. The problem with your financial problems is that only one person can fix those problems, and that person is you.” Explaining further, he said, “Your financial situation is much like your golf game. You can read books, attend seminars, hire a coach, and take lessons, but ultimately, only you can improve your golf game.” 

One of the reasons so few people attain great wealth is because, when people get into financial trouble, they do not know how to get out of trouble. No one has ever taught them the basics of how to diagnose the particular financial problem they may be in. As a result, although people may know they are in financial trouble, they do not know how to read a financial statement or how to keep accurate financial records, so they do not know how serious their financial problems are or how to fix them.

Facing my ruined financial statement was a painful experience. Yet facing my problems was the best thing I could have done. Rather than wasting time pretending I had no problems, I faced my financial statement and my problems and found out exactly what I did not know, as well as what I needed to learn in order to fix my financial situation.

We’ve Been There Before

Now, perhaps someone once told you that a mortgage isn’t the type of debt you need to worry about, so let me squash that lie right now: your house is not an asset and therefore your mortgage is not considered good debt. Read that again. Your house is bad debt!

The average American owes $6,354 on bank-issued credit cards. Whether your number is higher or lower than this average makes no difference—the credit card debt payoff strategies I’m about to share with you apply equally.

And how do I know these tricks to pay off credit cards work so well? Kim and I once had a tremendous amount of bad debt. Some were from being broke and charging as much as we could on our credit cards just to survive. More bad debt came from my velcro nylon wallet business that failed. So trust me, we’ve been there and done that—and now we’re passing our knowledge along to you.

Getting Rid Of Credit Card Debt

  1. Take all of your credit cards out of your wallet or purse. Check the various outstanding balances on each one.
  2. Take the cards with the smallest amount of bad debt on them, and pay them in full first.
  3. Once you have paid off those cards, put them out of sight. Or, if you don’t have the discipline to stop accumulating bad debt with your cards, call up the credit card company and cancel them.
  4. Do the same on the remaining cards. Keep whittling away that outstanding bad debt until it’s gone.

Please understand that this is a process that, in most cases, cannot be accomplished in just one or two months. Depending on how much cash you have, this process of whittling down your credit card debt may take several months or even years. But do it, because it’s a wonderful feeling when you are no longer a slave to those monthly bills. 

Once you have control of your credit cards, you may want to take the extra money you have and start to pay off the mortgage on your home. Most homeowners have the option of prepaying their mortgage. In many cases, it makes sense for homeowners to save thousands of dollars by prepaying their mortgage each month. Even just tacking on an extra $50 a month to your principal payment will take years and thousands of dollars off your home mortgage

The best news is that those individuals who have the willpower to follow these simple measures will find themselves financially solid and free of major bad debt within a few years. It may sound impossible to you in your current financial situation, but trust me—these measures will work for you. 

Harnessing The Power of Debt

There are many reasons that I do not join the bandwagon that says, “Cut up your credit cards, get out of debt, and live below your means.” I don’t say those things because I don’t think that advice solves the problem for anyone who wants to be rich.

For people who want to have a lot of money and enjoy the lifestyle that money can bring, simply cutting up your credit cards and getting out of debt does not solve that problem, nor does it necessarily make people happy. On just basic financial principles, I do agree that cutting up your credit cards is good advice for most people. But simply getting out of debt does not work for anyone who wants to become rich and enjoy life. If a person wants to become rich, a person needs to know how to get into more of the right kind of debt, learn how to respect the power of debt, and learn how to harness the power of debt. 

Most people know how to get into debt. Most people are experts at getting into debt. The problem is, they get into debt and get poorer. Most people take good debt and make it bad. As rich dad said to me, “All debt is good debt. But not all people know how to use debt, so they turn good debt into bad debt.”

If you want to be rich, you first need to work on your context more than on what you do. As rich dad said, “Most people already know how to get into debt. The problem is, they do not know how to use debt in their favor. If someone wants to get rich using debt, they first need to change their context. Then they can use debt to become very rich.” If you cannot change your poor or middle-class person’s context regarding the subject of debt, it is best that you cut up your credit cards, pay off your house as quickly as possible, and just try and save money.


Robert Kiyosaki

Robert Kiyosaki
Editor, Rich Dad Poor Dad Daily

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Robert Kiyosaki

Robert Kiyosaki, author of bestseller Rich Dad Poor Dad as well as 25 others financial guide books, has spent his career working as a financial educator, entrepreneur, successful investor, real estate mogul, and motivational speaker, all while running the Rich Dad Company.

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