Credit card debts are never fun. They mount up and ruin your credit in one fell swoop. While it seems that the sanctimonious effects of unpaid debt are merely inevitable, this is not the case.
You can do certain things to prevent yourself from falling into the trap. For one, you can undoubtedly follow an action plan to lower your interest rates.
And ultimately, in the long term, you can make strategies to pay off your entire card. It may seem unrealistic, but these changes to good credit are actually in your grasp.
The following are some ways to work towards paying off your credit card debt.
1. Survey your Lifestyle
Taking an inventory of how you live might not be your priority. After all, there are better things to do in life, like go out for food and shop.
However, remember that living above your means is at this point what got you into this mess. A taste for the good life is something ongoing into the brain through advertising.
However, you don’t need certain high ticket items to survive.
Think, for instance, about what you just purchased but don’t need. You might have a car, gold necklaces, or a hot tub.
While these are excellent items to have, they are not essentials. You can go to a jeweler or sell your jewelry online.
Make sure you dig up the receipts, so you get good resale value. Additionally, you can sell your car or take the hot tub back to the store.
If there is any way you can unload high ticket items, then do it. You can use this extra cash to start to pay down your debt.
Then later, when you can afford it, you can think about re-purchasing the items. You might find it interesting that you don’t even feel the same need for the high-end products that you did before.
You might like the feeling of having a better credit score and not paying high interest on the money each month.
2. Don’t Just Make Minimum Payments (Help Your Credit Card Debt)
Always willing to extend you more credit because you pay it off. That looks like you have a problem with spending above your means and will get you red-flagged. Ice your cards if you must, but don’t close the credit cards out.
Credit cards love it when you don’t put much money down towards your principal balance.
They bank on the fact that you won’t have any money to pay it off. The minimum payments are mainly there so that they get regular money coming in.
Sure, if you pay just that, your interest won’t go up. But conversely, you aren’t doing anything but paying the credit card company for the privilege of continuing to have debt with them.
Instead, you need to be putting aside more each month to pay off the balance. You can then actually make headway. And don’t rack up new charges while you’re at it.
Resist the urge to pay with credit cards unless it’s a dire emergency.
3. Ice Your Cards
Do you remember those movies where desperate people take out their ice chippers and start to pound away at the block?
They finally get to their beloved credit card, because they have fallen off the shopaholic wagon. You don’t want this to be you. But you can still take a scene from the movie and ice your cards.
Just put them in a bag of water that is ziplocked. You won’t have to do anything after that. You’ll realize that thawing out the block is just not worth the trouble.
Make sure you have all the pertinent details regarding paying off the cards though first.
4. Strategize (Credit Card Debt)
It can be an exhausting process not to know which card to pay off first. If you are swimming in debt, always tackle the higher interest one first.
This method means that next month, you will potentially be saving money. Always go about it this way. The lower interest loans can wait, such as lines of credit.
Talk to your bank about getting a line of credit if you think it will help you pay off your credit cards faster, provided that the line of credit has a lower interest rate.
If you continue to move along your money to ensure that you have high-interest loans paid off, you will already notice a difference.
5. Don’t Close Any Unpaid Cards
You might be tempted to take this route as a painless solution to your money woes. However, it’s not going to solve anything.
You will still have debt, and now you’ll look bad in terms of credit. You want to keep those balance limits as high as possible to show that you’re not an overspender.
If you close out the cards, the number will be low again as to your limit. This action is called lowering your credit utilization score. It’s when you have a certain amount of available credit that suddenly dips down.
You want it to look like the banks are always willing to extend you more credit because you pay it off.
That sounds like you have a problem with spending above your means and will get you red-flagged. Ice your cards if you must, but don’t close the credit cards out.
6. Try Talking to the Credit Card Company
You might not realize it, but humans work at the end of the credit card companies’ production line. They might have some power to wave a late fee or even lower your interest.
There may be new credit cards that have come out that you can convert to that have a lower interest rate. Rather than figuring out on your own what to do, you can try brainstorming with an employee.
Often, people that work for credit card companies are accommodating. They obviously won’t be polite if they think you’re trying to scam them or you’re just irresponsible.
Credit card debt negotiation. But if they see you’re making efforts, they might be able to pull some strings for you. After all, they want to retain your business long term. They don’t want you to think of them as an evil corporation that is just designed to get your interest money.
- It’s true though that some employees are different than others.
- You might catch one on a bad day, and feel they are genuinely unsympathetic.
- You also might have shown zero restraint in spending in the past so they might tend to be on guard.
But if your phone several times and talk to several people, the employees will probably read notes on your previous interactions.
If you come across as someone that wants to pay off debts and is polite, you might get someone willing to go the extra mile in helping you with an action plan.
If all else fails, talk to the management. The companies have considerably more leeway when it comes to helping you get what you need. They will be able to make decisions that employees lower on the totem pole are not authorized to make. Start at the bottom and work up.
7. Plan for Your Nest Egg
You might not be ready to purchase a home, but you can build a nest egg in other ways.
This rainy day fund can help you find money when you need it most. You can put coins in a jar. Or, you can hide cash in a purse that you only use in the spring. Any smart way to build up capital will help you in the future.
Then if you break your leg, you can revert to the money in your purse. You don’t need to put it on a credit card that you never end up paying off anyways.
A savings account that you don’t touch is also a great way to put aside money for another time. These accounts are separate from your checking, and usually, it costs you a fee to take money out.
8. Don’t Overspend if you Get a Bonus
When you get a bonus at work, you don’t need to spend that on luxuries. Take the time to plan out how to get out of debt instead.
You can celebrate by baking something for your family instead of having everyone order a ten-dollar dessert from a restaurant. And the best part of baking is the leftovers, which you generally don’t have a lot of after dessert night.
Any other time when you get money back, such as tax time, should be treated as income, not extra.
Unless you are debt-free, you shouldn’t be waving your money around like you don’t care. It’s not worth feeling blue later when you don’t have anything to show for all your hard work.
9. Budget Year Round
You might remember budgeting as something that your mother sat you down to do as a teenager. Back then, you might have scoffed when you had to put money into different envelopes.
Well, you probably wish for those days of dispensable income again. Now a lot of what comes out of your account is automatic bill payments and rent checks. It’s all in the name of surviving instead of eating pizza with your buddies.
With a year-round budget, you will find that you are more grateful when you can afford something, rather than just pretending you can.
Pretending to be productive can be exciting at times, but the highs are not worth the lows.
Slow and steady wins the race. If you save for miscellaneous luxuries, they will be something that you appreciate. And chances are, you will take good care of whatever it is that you own too.
10. Keep Up That Momentum
When you start paying off credit cards, it can feel free. You might be thinking that now you have more money again. Except this mentality does not hold water.
You never had that money, in the beginning. It was all money you borrowed and are racking up interest.
- Find some time instead of shopping for goods to shop for credit cards with lower interest rates. You’ll have to do a lot of math because you won’t always get a reasonable rate in the long term with ones that temporarily suspend interest.
- To know though, you’ll have to look at how long you plan on having the debt. Also, you might want to consider if you can afford the amount that is required for you to pay to switch. If they put interest on all the balance and
- Make you pay it before you switch, and it might not be worth it. It’s a lot of complicated equations because the companies design credit cards so they can make money.
If the Annual Percentage Rate is lower on another card, you still will suffer a credit penalty when you transfer cards. However, it will even out later because you won’t be in debt for as long paying higher fees of interest.
High interest is responsible for what is making your life miserable. It’s money you could have spent on other things but is just going to the credit card.
When you ponder this fact, it might give you the momentum to keep going on the track of getting out of debt.
11. Try to Go Cold Turkey
If you’ve tried these approaches before and failed, it might be because you need a reality check. You don’t quit addictions by pairing down.
Doing drugs once a month is almost as bad as once a week. It means that you continue in a pattern that is hurting you and you normalize it.
Instead, think of your new life as a debt-free. Visualize that your addiction is tapping your credit card. Don’t let yourself go there. If you don’t have cash or a budget for something, turn around and go home.
You will have a much more fulfilling life if you refuse to indulge yourself in just one last swipe. As you know, those ice blocks only work if you’re too impatient to thaw out the chunk. If you have a hairdryer and a few hours to kill, you know that easy money will be yours by supper time on Sunday.
When you switch your mindset to get serious about something, it’s incredible what you can accomplish. It will be like a light bulb going off in your head.
And the best part of the process is that others around you will start to trust you more with money too. But what’s even better is that you know you can bank on yourself.