Yes, we all have them don’t we? Those credit cards that seem to make our lives easier and more difficult at the same time. Most people have a love-hate relationship with their credit cards. On the one hand, it helps them build a decent credit score, allows them purchase items they wouldn’t have been able to afford and provide instant access to some sorely needed funds.
On the other hand however, it’s in the top 3 reasons why so many people are in debt (the average household owes a little over $15,000 in credit card debt). And since nothing feels better like being in control of your finances than paying off your credit card debt, we need to help you pay them off.
So, how can you do that? There are many “debt relief experts” with varying and sometimes contradictory ideas on how you can go about eliminating your credit card debt. Some are feasible, others aren’t. It is with this in mind and the fact that we know that you only need what works, that we have brought you some proven and effective credit card debt relief tips.
Debt-Free = Independence by Kimberly Brown-Azzarello, on Flickr. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Start With the Smallest Debt
When the average individual decides that he wants to start paying off his credit card debt, the first thing he does is try to pay the big debts immediately. The thing about paying the big debts first is that it won’t be sustainable in the long run. You see, many of us have other responsibilities.
So, what can you do? Start with the smallest debts first. You can’t climb a mountain from the top. You start from the bottom. Paying off the small debts first will motivate you to keep making the payments. More importantly, you’ll be able to gradually make room for the bigger debts from your monthly income.
Be Better than Minimum Payments
Most people are in the habit of paying the minimum 2%-3% of the balance on the card. Be better than that. Pay more; preferably in increments of 2%-3% every month. That way, you won’t feel the strain of the payment on your purse strings. I have heard some people say double your payment every month until you’re done paying off your debts. The reason this idea may not work is that doubling up every month is an unsustainable plan – and what you need is a sustainable debt repayment plan.
Transfer Your Card Balance
The idea behind this is pretty simple: transfer the balance from the one with the highest interest rate into the credit card with the lowest interest rate. Most credit card issuers allow for this. That way, you won’t have to pay as much interest rate as you would have if you’d allowed it to remain in the high interest card. As much as possible, resists the urge to use the newly cleared card so you don’t fall back heavily into debt.
Use Some of Your Savings
A wise man once said “troubles come in sevens”. That is so very true. Other things tend to come up when you’re trying to solve one or more problems. So, it is possible that whilst trying to get out of debt, you may need to get some funds from somewhere to pay off some of the debt whilst trying to keep afloat. If this happens, and you don’t have any alternatives, dip into your savings. But whatever you do, always make sure to have some decent funds for emergencies. This way, you won’t have to borrow money from anyone in the case of an emergency. So how much should be in this emergency fund? $1,000 or more is fine.
Avoid New Credit Cards
I don’t know where some people got this advice from, but I have seen many people make this mistake over and over again. Don’t sign up for a new credit card whilst trying to pay off the old one. No matter how low the interest rate or how amazing the perks, walk away. New credit cards aren’t good for you when you’re trying to pay off the ones you already own.
You may want to take advantage of the services of Scott D. Owens attorney at law in settling your credit card debt.
