Credit card debt is quite popular in America. However, don’t let that fool you into thinking that it is okay to have thousands of dollars of debt on a plastic card. Yes, credit cards can be useful in building credit, but they can also cost you hundreds to thousands of dollars in interest each year. Here are a few tips to get your credit card paid off once and for all.
1. Stop Using the Card: This is painful, but it is essential! Continuing using your credit card when you are already up to your eyeballs in debt will just keep you buried. If you have to cut it up, then do it. Once your debt is under control, you can always request a replacement card. What about an emergency? Establishing an emergency bank account of $1000, like Dave Ramsey suggests, is a better plan than relying on your piece of plastic.
2. Check Your Statement: The next thing that is crucial to do is to check your statements to make sure all charges are correct. Secondly, find any charges that you can return. Yes, returning $50 worth of merchandise on a $5000 credit card debt may seem insignificant, but it is the right step forward to paying off your debt.
3. Cut Something from Your Spending: Look at your weekly expenses. Do you regularly spend $5 on a Starbucks or $10 for fast food for your family? Perhaps you spend $40 a month to get your nails done. Whatever the luxury charges, put a temporary hold on them. Try to find an extra $25 a week in your spending that you can put towards your credit card. Then, make small weekly payments on top of the minimum amount due. Paying $100 extra towards your credit card each month will speed up the time its paid off.
4. Find Ways to Pay Off a Large Chunk: Look around your house for everything you don’t need that can sell. Sell the pricey stuff on Ebay or Craigslist, and put the rest out for a garage sale. Most people have an extra $1000-3000 worth of unused items in their homes. Selling it can be time consuming, but it will give you a nice chunk to pay off your debt. During tax season, you can devote a large chunk of your refund to paying off your debt too.
5. How to Pay Off Multiple Cards: There is some debate at which to pay off first: credit cards with higher interests or credit cards with lower totals. Some experts want you to tackle the high interest credit cards first to save you money. Dave Ramsey followers are encouraged to pay off the lowest debt first to create a snowball effect. Either method works, as long as you are power paying one of the debts. This means that you pay the minimum payments for all cards except the one you are trying to pay off the quickest. That one card you will pay as much as possible each month to conquer the debt.
Credit card debt is no easy task to deal with, but it is possible to be debt free. Keep yourself encouraged by reading other individual’s success stories of paying off debt.