Any person who has ever had to deal with credit card debit truly understands how difficult it can be to lower or eliminate this kind of debt. The typical interest rate is anywhere from 13 to 16 percent, which makes it even harder for people in debt to crawl out of the hole that credit cards can create.
It is important to focus on paying off the debts that have the highest interest rates first. This will make a bigger impact and remove a lot of the stress you currently feel regarding your debt.
Remind yourself how much more at ease you will feel after all of your credit card debt has been paid and how your entire financial outlook will improve.
In addition, all of the money that is currently going towards paying your debt will one day be extra money that you can add to your savings or use for other things.
To fully get rid of credit card debt, keep these steps in mind:
Keep a record of all expenditures for a minimum of two months.
Whenever you are thinking about buying an item, take a moment to decide whether or not you really need it. If you find that this is an item you can live without, don’t buy it. You will surely discover many surprising things about your spending as you track your budget.
Cut Down on Expenses
Once you have sufficiently tracked your expenses for a while, you will be able to find areas where you can reduce or eliminate spending. The money you take from these areas can be put towards paying your debts.
Try to Supplement Your Income
If possible, try to find ways to bring in more money. Go for that raise at work, do some overtime or apply for a second job. This additional income will make the process of paying off your debts go by even faster.
Find a Better Credit Card
If you still use credit cards, try to find one that has a lower interest rate and does not charge you to transfer your account. Be sure to keep your payments up to date. One missed payment could mean that you will have to pay much higher interest.
Negotiate A Lower Interest Rate
It may be possible for you to call your creditors and ask for a lower interest rate on your debt. Even if they say no, you risk nothing by simply asking.
Create a Snowball Effect
Organize all of your debt and place the accounts with the highest interest rates at the top. The account in the top position should receive the highest payment amount you can afford. For the other accounts, just make the minimum monthly payments. Once the highest debt is paid off, move on to the next.
Although this method is not as efficient, you can also organize your debts from lowest to highest. It is more rewarding in some ways to quickly check off the smaller debts, but in the end, you will be paying much more interest.
The main concern is to just start lowering your overall amount of debt. Getting started on a debt elimination process is more important that the exact process you choose. Taking positive action is the goal here.
Don’t Take on New Debt
As you are paying off your existing credit card debt, do not use your credit cards or apply for new accounts. Once your debts are paid off, do not resume the use of these credit cards.
By following these easy steps, it will be possible for anyone to fully rid themselves of their credit card debt for good. It may take lots of time, depending on the amount of debt you owe, but there is nothing more rewarding than financial independence.
Once you have paid your debts, all of the extra money can be used however you like.