If you’ve got credit card debt then you know how heavy it feels. It’s not an “acceptable” type of debt to have unlike student loans or a mortgage so it’s easy to feel shameful about carrying a balance. Believe me, I know how suffocating credit card debt feels, and it was the main catalyst for me when I decided to start my Spending Fast.
Turns out, credit card debt may be even more difficult to get rid of than you first thought. Ugh, I know.
After fees, interest, and other charges are added to your monthly bill, minimum monthly payments just won’t cut it for very long, and then you’ve got the carried over balances than are suddenly growing fast and then, how in the world do you dig yourself out of the hole and pay the debt down?
Well, today we’re talking about 7 things you can do to shed that oh so heavy weight of credit card debt.
1. Spend Only With Cash
To avoid larger credit card balances you need to stop spending on credit immediately. Re-work your budget to make cash available for all purchases until credit card debts are eliminated. If you can’t afford it in cash, you can’t buy it. This is all about some tough love, people.
2. Communicate With Your Creditor
When I started my get-out-of-debt mission I called up every single one of my creditors and asked for a lower interest rate. Some of them actually lowered it! It’s always worth a try to get a lower rate.
While this is most likely a call you’re trying to avoid it can be beneficial to open up the lines of communication with your creditor when you start to focus on your debt elimination. Contact your credit card companies and find out if there are any options available to you to make the process easier such as a reduced interest rate or a change of due dates to better fit your budget.
3. Snowball Your Credit Card Payments
The noted financial guru, Dave Ramsey’ endorses a snowball system of debt relief. This involves paying as much money as you have towards one credit card while paying the minimum amount on all credit cards. When the first card is paid in full, focus on the next card on your list making the minimum payment plus the money you are no longer paying towards the first card. Continue on until all cards are zeroed out.
4. Transfer Balances on the Right Card
Some credit cards offer a good promotional deal on balance transfer cards which allow you to transfer other card balances to the new card allowing you to make a payment to just one creditor. During the promotional period, you often get the advantage of a low or 0% interest rate which can be an incentive to pay off the balance as soon as possible. Just read the fine print, understand the fees, and make sure you have a large enough credit limit to truly consolidate your overall credit card debt.
Also, don’t make the mistake of canceling your credit cards because that can negatively impact your credit score. Keep the cards technically “open” but pretend they doesn’t exist so you don’t get yourself into trouble with them.
5. Sacrifice for the Good of Your Finances
To free up some additional monies to allocate towards credit card debt relief, commit to giving up unnecessary things in your budget. Cancel the cable package, spend less at the grocery store, or postpone the annual family vacation so you have more money at your disposal for debt payoff.
You can do this. Trust me.
6. Supplement Your Income
If it is at all possible to take on part-time work, do it for the sake of your finances. Dedicate all earnings from your job towards credit card debt relief until each card is paid off. Your incentive for the extra work will be the ability to say goodbye to your debts and your job when the time comes.
If you need some part-time job ideas check out this post on my blog: 37 Easy Ways to Make Money on the Weekend.
7. Consolidate Wisely
If you have options for securing a personal loan or a home equity loan, it may be beneficial to use those funds toward total elimination of your credit card debts. Only opt for getting a loan if your credit score is good and you have a plan for repaying the loan on time.
Do you have credit card debt? Does it weigh heavily on you?
Image source: skampy