Anyone with credit card debt knows just how challenging it can be. Interest rates are averaging 13 to 16 percent, and it’s not easy to get ahead once you have this type of debt.
If you have debts with high interest rates, make paying these a priority. It will bring you a lot of relief to pay them off as soon as possible and be rid of them.
Imagine how much better you’ll feel when it’s gone. Imagine how much better your finances will look without this debt. Plus, all the money that you’re applying to these debts will be available for other purposes when the debt is retired.
These steps will help you eliminate your credit card debt:
1. Track your spending to the penny for at least a couple of months. When you’re faced with a buying decision, ask yourself if you really need this item. Can you live without it? You’re guaranteed to find at least one thing that surprises you if you truly track all of your spending.
2. Reduce your spending. After all of that tracking, you can probably see where you’re spending more than necessary. Trim back and use the extra funds for your debt. Know that you’ll eventually end up with a lot more money in your pocket when this debt is gone.
3. Consider earning some extra income. Are you overdue for a raise at work? Ask for it. A little overtime or a second job can make a huge difference in knocking down that credit card debt. Try to find something that you will enjoy doing.
3. Consider earning some extra income. Are you overdue for a raise at work? Ask for it. A little overtime or a second job can make a huge difference in knocking down that credit card debt. Try to find something that you will enjoy doing.
4. Take a look at other credit cards. Many cards offer interest free account transfers. Keep in mind that these transfers are frequently only interest-free if you are on time with all of your payments. One mistake can result in interest being charged on the full balance, even the amount you might have managed to pay down.
* A card with a lower interest rate is probably out there. A few percent can be significant with a large balance or over a period of time.
5. Don’t be afraid to negotiate. You might be able to get your interest rate lowered with a simple phone call. Your creditor would rather get some interest from you instead of getting nothing. Asking for a better rate costs you nothing.
6. Build a snowball. List all your credit card debt from highest interest rate to lowest. Pay the minimums on all the cards except the card with the highest interest rate. Put everything else you can afford toward the highest one. When that one is paid off, repeat the process and focus the highest interest rate card from those that remain.
* Another version of the snowball is psychologically easier, but is not as efficient. This time, list all the credit cards from lowest balance to highest. Then follow the same procedure, focusing on the debt with the lowest balance.
* This version is more exciting because you’ll pay off a card quicker. However, it’s also more expensive since you’ll be paying more interest.
* The most important thing is to start decreasing that debt. Choosing a process is more important than choosing the best process. Just get moving forward as soon as possible.
7. Avoid adding to your debt. While you’re really working at paying off these cards, stop using them. Similarly, don’t start using them again after the debt is eliminated.
These simple steps are all anyone really needs to get rid of credit card debt once and for all. While it takes time, the new-found freedom is more than worth it. When it’s over, you’ll have all that extra money in your pocket to enjoy as you wish.
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