At times, a credit card debt can be big enough for you to declare bankruptcy, all because of a plastic card with a magnetized strip. The credit card is your best friend but it can be your worst enemy too. It attacks your finances stealthily. Before you know it, you’ve racked up a huge amount of debt. So how to eliminate credit card debt once and for all.
Managing your credit card expenses is really simple but as you know, simple doesn’t mean easy. If you’ve fallen into the credit card debt trap, you’re not alone. With the economic crisis looming over everyone’s lives, falling into a heavy debt situation is commonplace. A credit card is a huge responsibility. The credit card-induced debt is huge because of the added interest and late fees. You should only obtain a credit card when you have sufficient financial knowledge and sound spending habits. However, there are ways to recover from heavy debt from credit card expenses. After you’ve chosen from the many solutions to debt, you should equip yourself with the necessary financial information to avoid making the same mistake in the future.
Prioritization is always a must when you have debts. Budgeting is all about knowing your priorities and in this case, your credit card debts should be number one on your list. Paying for the debts may not put food inside your tummy but not paying for it will get you into even bigger trouble. The increase due to interest rates and late fees will make it hard to pay for the debts in the future. Start paying off the most expensive credit card payments. They have higher interest rates so get them out of the way.
If you still can, it would be a good idea to transfer your credit card debt to a low rate credit card. Low rate credit card is simply low rate interest card. That way, you only have to pay the dues itself and not the interest. It is the interest rate that causes the credit card bills to go higher than usual. Transfer all the debts to the credit card with the lowest interest and just stop using the credit card until you’ve paid off all your debts. A tip that works for a lot of people is paying credit card debts every other week instead of once a month. Paying more often motivates you to allot money for your credit card debts as often as possible so the money you have is immediately prioritized for the debts. The sooner you have it off your back, the better.
Fear is always a primary feeling when you can’t pay your credit card debt anymore. The first instinct is usually to avoid the bank or the creditor. If this is what your instinct tells you, do the opposite. The wise and intelligent thing to do is to contact the bank or the creditor and inform them of your inability to pay your debt. They will still want you to pay for your debt but given your humility to admit your inability, they will be more lenient and willing to negotiate with you. There could even be a chance of the bank or creditor allowing you not to pay the late fees anymore to lessen the total amount of load that you have to pay. It would help to have a substantial amount in your savings account as well.
You can also incorporate the snowflake method of paying for credit card debt. Every time you get money, send it immediately to the credit card company to lessen your outstanding balance. It doesn’t matter if its low as $10 every two days. The important thing is to reduce your balance. Micro payments always go a long way.
You can also seek the services of a debt management program to help you pay for credit card debt. The debt management program will go through your budget scheme and the rest of your financials, evaluate everything, and help you improve or setup a new budget scheme. But before working on the general flow of your new budget scheme, your financial counselor will help you pay for your credit card debt first. The counselor can talk to the bank or creditor about lowering your interest rate or eliminating the late fees. Banks will trust accredited financial counselors more so they’re likely to agree.
Take advantage of your debt management program by taking down notes on how to avoid credit card debt in the future. First of all, don’t get a credit card if you can’t pay the fees. Second, ask your financial counselor to help you write down your budget on paper. Remember, it’s difficult to keep track of your financials mentally. Make the payments on time as much as possible and check on your balance constantly. If you feel like you can’t afford to spend using your credit card, make it inaccessible.