Today, many credit cards holding individuals are suffocating in debt. It can be from neglect, not understanding how much credit cards can affect us, or financial hardships.Wink Capital is a well-known debt solutions company states that the interest rates are the highest in the U.S and are averaging around the double digits for a lot of individuals. Therefore, when it comes to paying off credit card debt, it seems like an endless cycle of getting nowhere, but here are the best ways to pay off your credit card debt.
Many individuals are capable of paying off their credit card, but it’s the interest that takes a toll and resets the clock every time a credit card hold thinks they are making their way to that silver lighting. With the correct strategies and knowledge, the debt can be paid off within a few months to a couple of years. Saying a couple of years does so a little much, but it is the same as schooling. You can have financial stability in a few months to a few years to ease your months and money troubles. Being able to buy the house and put down the 20% to dampen the blow or ask for a credit limit increase when you want to start your own business. In the long run, using proper tips to pay off your credit card debt is saving you thousands of dollars.
Here are a few best and proven steps to help you pay off your credit card debt:
Cease using your credit cards
If you continue to charge and pay for those cards but you aren’t paying the full balance, you are still hurting yourself and building up the interest. Running up balances is the last thing that should be a thought. If the item is not a big need, refrain from swiping so that you can pay off the balance in full by the end of the month. Easy right? No.
Financial situations get in the way and emergencies need tending too. Which means taking a few swipes to keep your head above water. Therefore, an option is to work on creating an emergency fund of $500 or more for when you need instead of turning to credit cards. $20, $50, or even a $100/ paycheck works as well. Don’t forget when bonuses or extra money comes in, add it to the emergency fund or add it to that card payment.
Budget for extra money
What does that mean? How it sounds. Over budget and consider those savings. This can happen when a particular bill or food list is down a few dollars or several dollars, but you already budgeted. For instance, you planned to spend $200 on your grocery trip, but only spend $75 (coupons?), but that is $125 that is a difference. That money can go toward your credit card payment as opposed to thinking its extra cash for those loafers. Another budget tip, instead of tricking your wallet and brain, is to make your debt payments priority.
As attested by Wink Capital from numerous clients, a popular method of saving is the 50/30/20 method. This means taking 50% of your income to household needs, only 30% to things you have to have, and 20% to your savings account or credit card debt repayment. This can be tailored however you need it to be. Try a budgeting report to help work out the basics.
Whatever approach works best for you, make sure you’ve got a budget that helps keep your spending under control — this way you’ll have a substantial chunk of cash to send to creditors each month.
Decrease interest rates
Interest rates can shoot through the roof in a blink of an eye. This causes serious financial problems because they are tacked on so high and make your debt appear 10x more than it really should be. But you can try a few tips to reduce those rates. This includes asking the creditor via phone. They are on a recorded line and you should do the same when asking. It never hurts to ask to have a reduction in interest rates.
If you have multiple credit cards, do a balance transfer with a limited 0% interest. This does require you to have good credit and take advantage of it during the promotional offering stage. Finally, is a personal loan. You can borrow money to consolidate your debt. This means there is one debt that has been reduced and can be paid monthly.
If the consolidation was the method chosen, make sure it is done monthly. This is one of the best and fastest ways to get rid of credit card debt. Avoiding any more credit card debt while you are doing a repayment is very important. Repayment is as simple as calling up the creditor and asking if you can do a monthly payment. Some may ask to do a prepaid payment upfront. Repayment may familiar because student loans are notorious for this method.
Stick to a payment plan
It is unbelievably important to stick to your payment plan. A lot of times the “shiny new object” syndrome takes over and paying debt off falls by the waist side. If it is possible, doing automated payments and considering your creditor first is the best option. It’s one and done, but budget it in your expenses. That way didn’t see, didn’t know the method applies. As each card drops off, you are that much closer to financial freedom.
With this best pay off steps, it is possible to get rid of your credit card debt and finally save for that Bora Bora vacation, or the new house repair that has been staring you in the face. It’s simple to take care of your debt, but it’s the implementation stage that can trouble a lot of individuals that have debt. Use these steps and enjoy being debt-free.