Paying for your daily coffee and that super cute pair of shoes with your credit card may seem easy at the time. Until the bill comes and you begin to feel the staggering weight of that little plastic card.
Credit card debt is no joke and it feels overwhelming to many people. 45% of Americans have credit card balances and they average about $15,956 per household.
Have no fear! There is a way to get out of debt quickly and I have some tips on how to do just that.
Read on to see how to get out from under the tremendous weight of your credit card debt in record time.
1. Stop Using Your Credit Cards
The most obvious of solutions, yet the most difficult to accomplish.
Many people use their cards for every purchase they make and the little charges can add up quickly.
Instead, pay for things with cash. Doing this will help you realize how much money you are actually spending and will eventually curtail your spending habits.
2. Set a Budget
The next step is to sit down and write out a realistic budget.
Start with your monthly income and subtract all your regular expenses such as rent/mortgage, utilities, groceries, and any other bills you pay on a monthly basis.
Now that you see exactly where your money is going, you can see what things can be cut out of the budget so you can use the extra money to pay off your debt.
3. Transfer the Balance to Another Card
If you notice that one or more of your credit cards have extremely high interest rates, you should look into a different card with a lower interest rate.
Compare several different card options, such as a UOB credit card, to find the best deal. Some banks will even offer lower interest rates for a credit card balance transfer from another bank.
By doing this, your overall interest rate will be lowered and it will be much easier to pay off the new card with fewer fees being tacked on each month.
4. Credit Card Debt Consolidation
Another way to help lighten the load of your credit card debt is to consolidate your numerous balances.
You could take out a short-term personal loan to pay off those pesky credit cards. It is much easier to make one payment rather than to manage several bills that come in each month.
Often times a personal loan will also have a lower interest rate than the credit cards you’re trying to pay off.
Remember, lower interest rates means less money that gets added on to your debt each month.
5. Pay More Than the Minimum
The more you pay on your card each month, the better!
By paying more than the minimum required payment you are reducing the total amount owed. Since the interest charges are based on the total amount owed, this reduces the amount of interest being added on.
Aim for making payments that are double the minimum required payment each month. You could see the credit card debt melt away like ice cream in the sun.
Debt Free… Now What?
Now that you are on your way to a debt-free lifestyle, why not discover a way to improve and protect your credit rating?