Credit card debt is the most common and dangerous form of debt owed by most of us. If you have credit card debts, don’t let them paralyze your financial torso. Instead, take charge of your financial health and try to solve your monetary issues before it’s too late.
Figure out how you can defeat credit card debts and make your finances smile again:
1. Pick up one debt at a time
If you carry a balance on multiple credit cards, make sure to pay the minimum on each card. After that, focus on paying back the entire balance on 1 card at a time.
You can choose one of these methods to clear your dues:
- Debt Snowball – In debt snowball method, regardless of the interest rates you start paying the dues from the smallest balance to the largest balance.
- Debt Avalanche – In debt avalanche method, irrespective of the balance you carry on your cards, you pay back the debts from highest to lowest interest rates.
2. Make more than the minimum payment
If you continue paying only the minimum amount on all your credit cards, it takes longer to pay off the bills and become debt free. But, if you pay more than the minimum, you pay less toward the overall interest rate. Keep aside some extra money from your paycheck so that you can pay more than the minimum on your credit cards.
3. Consolidate your credit card debts
It often gets difficult to manage multiple debts at a time. In this case, you can opt for debt consolidation, which combines all your debts into a single monthly payment.
You can consolidate your credit card debts in 3 ways, which are:
- Credit card debt consolidation program – It combines all your bills into a single affordable monthly payment with a lower interest rate.
- Balance Transfer – All your balance is transferred to a card with lower interest rates or to a 0% APR card (the 0% interest rate is usually available for a certain period of time).
- Credit card consolidation loan – You take out a loan with a lower interest rate and pay back all your dues.
Note: Read more about these 3 credit card debt relief options here.
4. Fix the loopholes in your budget
Recheck and prioritize your budget and find out the places to cut down your expenses.
For instance, you may get discounts if you get internet and cable connections from the same service provider.
Also, try to hit the stores with a shopping list so that you don’t end up buying unnecessary items. This way, you can fetch extra money to pay back your credit card debts.
5. Be organized
Take a spreadsheet and fill out your credit card details such as the amount of debt and the interest rate on each card. By organizing your dues in this way, you’ll get a clear picture of the total amount of debt you need to pay back. Thus, it’ll help you create a proper debt repayment plan to get out of debt.
6. Take up a part-time job
If you’re not left with enough money to repay your debts after meeting all your necessary expenses, do a part-time job (at least till you pay back your dues).
For example, you can teach, do freelance writing, babysitting, event planning, and so on.
Do you know any other tips to help you pay off credit cards easily? Share your views with us.