Being overwhelmed with debt is not good. In the present economic crisis, people should establish their life with financial security. The first thing to do in order to achieve the same is by making yourself free from credit card debt.
Tips to eliminate credit card debt
If you’re eagerly waiting to get rid of credit card debt, then follow the below mentioned tips and keep your credit card balances under control:
- Arrange your credit card debts: If you have more than 1 credit card, then enumerate all the details of the cards such as their balance, rate of interest and minimum monthly payments. Try to pay the maximum on the highest interest credit card and then make the remaining payments on the other cards. After the highest interest credit cards are paid off, do the same for the remaining cards. In this way, very soon you’ll be able to get out of this vicious cycle of credit card debts.
- Prepare a budget: Make a list of your monthly income and expenses along with your credit card payments. Calculate the monthly equivalent of your annual expenses like taxes and insurance by dividing it by 12 and add it to the list of monthly expenses. Note down the further expenses you do like shopping, eating out and entertainment. Double check whether you can reduce on any of your discretionary spending, so that you can pay some additional amount on your card balances.
- Keep the credit card away from your wallet: As the saying goes, prevention is better than cure, so refrain from using your credit card while making any purchase. Always use cash for any transaction, so that you’ll give a second thought before actually buying the item. If you want to keep a credit card as a backup for emergency, then store it under a pile of important papers. So that you’ll not be tempted to use it frequently but only in case of a dire situation for the same.
- Use only one credit card: If you have multiple credit cards, then choose the card which is most beneficial for your needs. For example, the card which gives you maximum reward points or the card which has minimum interest. Then transfer the balances from all other cards to the card of your choice. Now use only this card and try to be clear off any debts.
- Contact creditors to lower interest rates through negotiation: At present, the average interest rate of credit cards is above 14 percent. Few credit card companies charge more than 20 percent for the card. Usually, the interest rate on the card increases if you don’t make your full payments each month. If you are not able to establish your credit in good standing by making regular payments, then try to negotiate with your credit card company to lower the interest rate. If the company agrees to lower the rate, then it would be easier for you to repay your all credit card debts faster.
If you follow the above mentioned tips carefully, then I’m sure very soon you will be able to make yourself free from this vicious cycle of credit card debt. It may take some time, but if you continue to follow the plan, in near future you’ll be happier and most importantly - a DEBT-FREE person!!
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