Do You Know What You Owe?

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There’s an old saying, “Knowledge is power.”  There’s a level of truth to that.  When you have knowledge of something, you have the potential to apply it and possibly improve your life.  This philosophy works with regards to credit card debt.  Read on and see why.

Frequently, I speak with people who tell me, “I’d like to get out of credit card debt.”  One of my first questions for them is “How much do you owe?”  All too often, they respond in silence or they look at me as if I am from another planet.  Then, there are those few “brave” souls who, upon hearing this question, look to the ground and have the courage to mumble, “I don’t know.”  (And, of course, that, too, is the implied answer of those who do not verbally respond).  If you don’t know how much you owe, it is difficult, and dare I say Impossible, to be debt free.  And there are also those people who don’t know what they owe, don’t want to know how much they owe, and even expect to die in debt.  This article is NOT for them.

On the other hand, if you are one of those people who genuinely says, “I want to be free from credit card debt, but how do I start?” then you are seeking knowledge.  You want assistance; you want answers.  You want to be debt free.  But first, you must know how much you owe.

Here is a series of steps to help you:

1) Know How Many Credit Cards You Have:  For some people, this is simple.  “I have two.”  “I have three.”  “I have five.”  For others, who have a longer credit/buying history or have a problem or addiction to credit cards, as I did, he answer might not be as simple.  Either way, just take your time and make sure that you account for every credit card that you have.

2) Know Which Cards Have Outstanding Balances Depending on how many cards you have, there may be some on which you are carrying balances and others that are at zero.  Back when I was a “chronic” credit card user, I had between 12 and 14 “pieces of plastic.”  The majority had outstanding balances and a few were at zero.  Sometimes, I would look at those few cards that had a zero balance and “convince” myself that I did not have a problem with credit card debt.  That was the ultimate in denial!  Since our eventual goal is to be completely free from credit card debt, we will focus on those cards with balances due.  NOTE – Take those cards with zero balances and put them safely away.  Do NOT use them!

3) Know What You Owe On Each Card:  Some of your credit cards might have a high balance, while others have a low (or no) balance.  The key here is to know exactly to the penny what you owe on each card.  Grab a piece of paper and a pen and write down the name of the card and the balance due.  Do that for every card.  List the balances from smallest to largest.  (In an upcoming article, I will address the significance behind this).  Something to keep in mind: It is more important to know what you owe on each card than it is to know the grand total of your credit card debt.  This, too, will be addressed, in detail, in later articles.  But for now, suffice it to say that you are gaining knowledge: you know what you owe on each card and  you are becoming aware of how often you use the card (as well as where, why, etc.).

4) Know That You Can Do This!:  It is easy to get overwhelmed when thinking about credit card debt.  I know that I was when I first decided to change my habits and pay off my debt.  But by becoming proactive and determined, I focused on the task at hand and as a result, I have been free from the albatross of credit card debt for many years.  Keep in mind that many people have already done this.  You will, too!!

Remember that “Knowledge is power.”  Now that you know exactly what you owe, you are ready to go!

Joe Paretta is an author, speaker, and coach. His first book, Master The Card: Say Goodbye to Credit Card Debt…Forever! (Balboa Press, 2010), is one which he considers “a labor of love.”  After accumulating $12,000 in credit card debt, Joe changed the way he thought about and used money and credit cards. As a result, he has been free from credit card debt for many years and coaches others to freedom, too. To learn more about Joe or to purchase his book, visit his website