8 Steps to Reducing Credit Card DebtBy Caitlin in Credit
Many people today are under credit card debt and don’t know how to get out. For some, it becomes a habit and they keep getting in and out of it. It is a good habit to buy only what you have money for and not spend the money you are going to earn tomorrow on the luxuries of today. It is also wise to keep your credit score high so that you can use the credibility if you need any loan in future. Here are 8 steps you can take to break the habit and become financially smart.
1. Put Them Aside
The most obvious step is to stop using them. It is because you have them, you get tempted to buy things that you don’t have the money to buy in cash. Advertisers take advantage of this fact and come up with lucrative offers on credit cards. The merchants sell their products and services, the banks get interest on the amount and the user gets nothing but a big hole in their pocket. Those who have suffered enough or get easily influenced must stop using credit cards immediately. The world still runs fine without them so just lock them up and don’t go looking for them.
For more information check out this article on the pros and cons of using credit cards.
2. Pay Less as Interest
When you delay making credit card payments, you have to pay interest on the amount. Different companies offer different rates of interest and it makes a lot of difference when the amount is more. Always try to get a card with least interest rates. Some banks also entertain your request to reduce the interest rate, depending on your past credit history and the competition they have.
3. Minimum Payments Option
There is an option through which some amount gets automatically transferred to cater to your credit card bills. If you pay this minimum amount, no late fee is charged from you. This holds good especially if you know what your expense is going to be, like a monthly installment. The remaining balance is carried forward to the next month bill.
4. Pay More
The way you can pay less, you can also pay more. Whenever possible, pay a little extra to maintain a negative balance. This way, you feel free while using the card for the next time. Choose the card with maximum interest, and pay a little extra.
5. Use a Friend
If you have a friend you can compare your progress with, nothing like it. Both of you make goals together and try to bet each other. It becomes like a game and you can get out of the situation easily and without feeling bad. Company also does not make you feel guilty and keeps you focused.
6. Keep track
Once you have set up a goal to get out of debt, it is important that you keep track of your progress. A big goal might feel overwhelming and you must break it into small monthly goals. these goals must be realistic so that you can remain motivated until your objective is accomplished.
7. Avoid Guilt, Stay motivated
This is the most important step because you also need to keep yourself disciplined. read stories of people who have achieved success in life and believe that you can get out of debt if you set your mind to it. be ready to make changes in your attitude and your lifestyle as required. With a positive attitude, all things are possible.
There is nothing to feel sorry about getting into debt. We all fall for it some time or the other.
8. Cut Your Expenses
Most of the credit card debt in the world is because people tend to spend more money than they actually have through the card. The money is not going to magically appear in your account some day and hence it is better to spend wisely and buy only what you can pay for. Some areas where you can cut down spending are entertainment, eating out, alcohol, fashion clothing etc.