It’s not something you wanted to check off your bucket list, but hey – racking up debt on a credit card is just another step into adulthood. Hoorah.
Unfortunately, credit card debt can get out of hand quickly. Being swamped by debt and haunted by credit collectors can be seriously detrimental to a normal lifestyle. There are some guidelines credit users should adhere to, to avoid being chased by the debt collectors.
- The smart financer will eliminate their credit card debt ahead of time by simply not spending money they don’t have. This is simpler than a lot of people seem to realize – don’t consider your credit card to be money.
- Treat it like a bank card, and only spend money that you know you have.
- Don’t spend your whole paycheck before you know what it’s worth.
- Don’t spend money you’re owed – keep in mind, you may never see it.
These tricks, and a bit of grit and determination, should be enough to prevent accruing debt in the first place. For the unlucky few who didn’t consider this (or who had to use credit cards for emergencies, etc.) read on – the stress of paying off your credit card debt can be eased with these tips.
Stop Creating More Debt!
This sounds like common sense, but a lot of people overlook this most crucial step. One credit card’s debt starts reaching zero, so they decide to start racking up purchases on a new credit card. Just because you’re paying off one card, and the interest payments on a new card will be minimal, does not mean you should spend more! Isn’t that why you’re trying to figure out how to pay off your debt, anyways?
If you can’t keep credit cards on you without spending money, leave your cards at home in a safe place. If an emergency happens, you know where they are.
Organize Your Debt Payment Strategies
Think. A lot of people don’t pay their debts off strategically, and end up spending more money.
For example – don’t make four small separate payments to four loans simultaneously. Take all four small payments, and use them to work towards paying off the smallest loan. If you don’t, the loans will all continue gaining interest at a momentum that could speed past your income.
Strategizing also allows you to easily monitor the total amount of money that you owe. If nothing else, having a plan will ease the stress of owing money! Pay the smallest off first, and work from there.
Pay What You Can – Not Just What You Want
Look – the faster you get that debt paid, the sooner you’ll put a halt to that stupid compound interest. Even if you have enough on your paycheck to pay off the minimum and go for wings and beer afterwards, you might want to reconsider. Trust me, being debt free makes those wings and beer – all the better.
Chucking in an extra $20 or $40 a month for the duration of your loan would save you a fair amount overtime. Obviously the size of a loan can vary tremendously, but adding a bit more to the payment on each one, will surprise you at your savings.
Consolidating lets you mash some of your bigger, high-interest debts together. The new debt owed may have a lower rate and you’ll be able to work towards paying off a single lump sum instead of picking away at all those smaller debts.
Consider A Balance Transfer Card
If you’re overloaded with a variety of different debts, you could consider getting a balance transfer card. In essence, a balance transfer card allows you to borrow money from a bank with minimal interest.
After successfully completing your application for a balance transfer card, you can load the debt from all of your credit cards onto it. The bank will cover your debts, and in turn, offer you a lower interest rate on the transfer card. This way they’re able to pay off your debt and still maintain a source of income, instead of piddling away your pay checks towards interest payments.
However, there are a couple things to look out for when considering a balance transfer card.
- The transfer fee itself can put a damper on the whole process. If it’s more than 1% of your total transfer, you should consider looking somewhere else.
- The promotional period. Why bother getting a transfer card if the promotional period won’t give you time to pay everything off?
- The interest rate. It’ll be lower than what you’re currently paying, but check it against the other costs.
Refinance your lifestyle
This is an option that everyone knows about, but very few people seem to acknowledge. This society breeds its people to live glamorous lifestyles, often at the cost of their very own pensions. Do you really need that second latte in the afternoon? Is it so bad to buy discount McDonald’s latte?
An idea for thought: are you more uncomfortable living in constant stress because of owing thousands to a credit company? Or are you more uncomfortable buying food that’s on sale while wearing clothes from a discount shop?
Weighing the two choices, it seems more sensible to eliminate a lifetime of stress by making less extravagant purchases. It’s really a small price to pay for the peace, comfort and future of you and your family. Simple food for thought!