Feeling the burden of credit card bills! Quick tips to pay off your credit debt
High interest charges and pending balances can drain your wallet rapidly. Credit card debt is among one of the major problems in the US. A recent study has revealed that out of every four individuals, one has a credit card debt exceeding his/her savings. The average household credit card debt is $15,000 (creditcards.com) and it indicates the current financial status of average families in our country.
Are you sailing the same boat? Taking care of an outstanding credit card debt can be overwhelming. However, it is possible to get out of the credit crisis with a systematic and determined approach. You can easily get off the credit card debt provided you follow a debt diet!
How to pay off your credit card debt?
- Build a plan to pay off your credit card debt: Start with all your credit card statements and list down their respective balance and rate of interest. List the credit card with higher interest rate at the top and lower ones in a similar manner. Find out the amount of money that you can pay off every month and you need to move from one credit card to another.
- Start with highest APR: Every expert would advise you to start with the card having highest annual percentage rate. Start by doubling your payments and add up as much as you can to the amount. Paying off the credit card with highest APR will help you save money in the longer run. In the meantime, make sure to pay minimum payment on rest of the cards.
- Consider credit card debt as an emergency: You have to consider credit card debt as an emergency and try to get out of it as soon as possible. Start with a new budget and learn some frugality tips such as use coupons, use different groceries, prefer public transport for few months, and limit restaurant eating. Try to get a part-time job to increase your income stream. It might include typing, organizing, and even writing. These small steps will prove to be critical in paying off your debt.
- Transfer balance to low interest credit cards: It is best to consolidate your debt to a single card with low interest rate. The key is to make a large payment every month and it might help to automate these monthly payments. Low interest credit cards might even offer an APR of 12% or even less as compared to the regular 21% credit cards. Make sure to follow the consolidation program in an effective manner.
- Find a source of motivation: Motivation plays a crucial role in every difficulty. You need to find a source of motivation while paying off your credit card debt. It can be from your family, friends, and even an online support group. Give yourself a treat at every milestone. You can even reach out to some non-profit credit consultation firm for a spending budget plan.