As mentioned in a previous post, I’m drastically trying to eliminate my credit card debt. I’m about half way to my goal, and plan to have all credit cards paid off in about 6 months. Here are some tips I’ve been using:

1. Pay with Debit - I’ve learned that if I have cash in my pocket, I burn through it. It’s too easy to stop in at Starbucks, catch a cab, order a pizza, or pick up a book. With debit, I always have a running tab of all my expenses that’s easily downloaded into Microsoft Money, to be categorized and analyzed.
2. Consolidate - I currently have about 6 personal credit cards and 3 business cards. However, I rarely use most of them. In fact, if I need to charge anything, I will use my Discover card for personal or my Capital One card for business - both of which have cash back and/or rewards points.
3. Pay Balance in Full - For both cards I use on a regular basis, I almost always pay off the balance each month in full.
4. Balance Transfers - Find the balance transfer offers with the lowest interest rates and fees. The three cards I have balances on average between 3.99% and 5.99%. I never purchase anything on these cards. If you are paying double digit interest rates, do whatever you can to get these reduced asap!
5. Don’t Neglect the Emergency Fund - I think this is extremely critical for small business owners who may have a bad month or two and not get paid. I try to keep at least 5-6 months expenses in an emergency fund at any given time. Yes, if I were to deplete this fund, I’d have all my credit debts paid off with a few dollars to spare, but I’m too risk adverse to take that chance. I prefer the security and peace of mind of having cash reserves just in case over the constant worrying about how I’m going to pay my monthly bills.