So how do you decide where to send the extra payments? Should you split it up among all the cards or focus on just one? We recommend targeting just one card with the extra payments. There are two ways to decide which one to choose, but first you need to do a little homework to minimize your existing finance charges.

In a previous installment in this series on Escaping the Credit Card Trap, we told you about transferring high interest rate credit card balances to new cards with low promotional rates. What we didn't mention is why you should transfer those balances to a new card instead of an existing card that already has a high interest rate balance, even if they offer a lower rate for a balance transfer. Most credit cards apply your payment to the lowest interest rate balance. That means your payment will go to repaying the promotional interest rate transfer balance until it is all gone before one penny is applied to the rest of the balance which is sitting there gaining interest at a much higher rate. Depending upon the amounts and rates, these kinds of balance transfers can work against you. You want your payments to be attacking higher interest rate balances first.

Once you've gotten your credit balances in the lowest possible interest rate accounts that you can, we suggest either of the two following strategies for deciding which one to pay off first. Mathematically, you should always pay every spare cent to the card with the highest interest rate first. This lowers the amount of interest charges that you incur every month and helps you get out of debt as fast as possible. If you are committed to getting out of debt and disciplined enough to make sure that you send every bit of spare cash as extra payments against this debt, then that's the way to go, hands down.

If, however, you have moments of weakness, and find yourself wavering between sending the cash to the credit card company or going out to a restaurant for dinner, then there's another option that might make it easier to stay committed to your goal of becoming debt free. Attack the credit card with the lowest remaining balance first. Pay it off and get rid of it. There is no greater motivator than success and knocking off credit cards one by one can help you stay focused not only on the longer term goal, but can provide intermediate successes along the way. After all, the only way to get rid of all your credit card balances is to stay focused and stay committed to the goal for the long run. If ignoring the mathematically best option helps you to achieve that commitment, then this might be the best option for you.

Either way, you need to be consistent and immediately stop all credit card spending. As we have already mentioned, though, don't cancel the accounts (unless they carry an annual fee, of course) or you risk damaging your credit rating even further. In a future installment of this series, we will talk about the responsible use of credit cards, but only AFTER you've paid off all your existing balances.

Author: Brad Sylvester