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Tips to get rid of credit card debt from Rachel Cruze

Cruze said to start by paying the minimum on everything you owe and save a little cash on the side.

HOUSTON — If you’re pulling out the plastic more these days, you’re not alone. Americans have 13% more credit card debt now than last year. That’s the biggest annual pace in more than two decades.

That’s why we’re talking to bestselling author and financial expert Rachel Cruze with Ramsey Solutions.

“The interest they pay is how these credit card companies make money but for me, I don’t want any part of the industry personally,” Cruze said. “I’ve got a debit card.”

Since Americans are in $841 billion in credit card debt, we asked Cruze for some tips to get rid of the debt. She says that we spend more with a credit card because we’re trying to acquire points and we don’t have the same attachment to a card as we do to cash.

“Statistically, you do spend 12-18% more,” she said.

Cruze said to start by paying the minimum on everything you owe and save a little cash on the side. The goal is to get a $1,000 emergency fund first. Then, Cruze recommends paying the minimum on all your larger balances and start paying off the smallest balance first.

“As you attack it and pay it off, then you're going to go over to the second smallest debt,” Cruze explained. “That's called the debt snowball method."

That method was made popular by her dad, Dave Ramsey. The method takes effort but it works.

"When you get those quick wins you actually get hope inserted into your situation,” she said. “If you're living paycheck to paycheck, a lot of people feel hopeless. They feel like there's no way out."

Cruze believes that personal finance is 80% behavior and 20% head smart. If you change your habits, you can get out of debt.

The whole idea is to create emotional and financial freedom.

RELATED: Rachel Cruze: How to save money on back-to-school shopping

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