If there is one thing that just about everyone agrees on today, it is that credit card debt is soaring and more than ever it is hard to get out from under it. Just making those minimum payments won’t do it, in the long run it will leave you with even more debt and your credit rating ruined.
But with almost half the population carrying over a debt from one month to the next, a way needs to be found to get our country out from under this burden. It can be done, it simply needs direction and discipline.
Start by Avoiding Impulse Purchases
If you are the kind of person who just can’t resist a sale, put that credit card in a place where the point of sale technology won’t make it so easy to buy. After all, one little swipe just doesn’t feel like hundreds of dollars being added to your debt load.
When buying becomes this easy, we are all bound to get in trouble. But if you have worked at developing good habits to stop that purchase impulse, here are three ways to now get that debt back under control.
One Card, One Debt
You can start by looking at all your credit card statements and identifying which one has the lower interest rates. If you can, move all the rest of your credit card debt to that card and work hard to get that debt under control. If you can’t do this, then your next best strategy is to start paying off that highest interest rate card first, just making minimums on all of your other cards.
Another way to tackle this would be to work at eliminating the card with the smallest debt amount by focusing on paying it off first. That kind of satisfaction can then inspire you to keep going and pay off each card one by one.
Negotiate Your Interest Rate
If your cards are all high interest rate cards, see what you can do to lower that rate. Talk to your bank about it. Often, we use higher interest rate cards because of the rewards they offer. If you can, let go of that reward system.
Instead, opt for a simple no frills card and you will often find it has a lower interest rate. Getting out from debt is far more important then getting some free miles on that airline credit card.
Switch to Bi-Monthly Payments
You would be surprised how much of a difference this can make, even if you are only making minimum payments on a card. Because interest is calculated daily, making that extra payment mid-month can make a huge difference in how long it takes you to pay off that card. You eliminated 15 days of interest compounding if you pay that minimum twice a month, but it is a small amount to pay each time.
Pay Debts First
If you should come into a bit of money, say from an inheritance or a bonus at work, use it to help get out of debt. You may have big ideas of investing that money, but in the long run getting out of debt is always the smartest move.
After all, when you get out of that credit card debt, you will have those couple hundred dollars you were paying in interest free again. Just think what kind of vacation a year of no debt can pay for this year!