Due to the very attractive option of “sign now, pay later,” more and more people are opting for credit cards. Unfortunately, that is also the easiest way to drown in credit card debts, simply because of the “I can pay that later” mentality. If you don’t get things in check on time, saying “Oops” will not save you from the huge stash of debts continuously piling up.
If you are among those people continuously struggling with this problem, here’s how you can slowly but surely get rid of credit card debt.
- Hide the credit card
We know, “why have credit cards if we don’t use it?” But studies show that people paying with cash end up saving 20% more than those paying with their credit card. The belief is that because people can’t actually see the money, they are willing to pay twice as much. On the other hand, people with cash in their hands become more contemplative with what they buy, therefore reducing the risk of credit card debts.
- Keep track of your spending
While we may not want to spend our days stressing about bills, it’s good to keep an eye out on what we spend. Experts recommend that we go back and revisit our progress every few months, without letting it take over our life. It took us some time to get into this debt; it’ll certainly take some time to get out of it as well.
- Clear the smaller balances
Although you may want to get rid of huge balances first, you should start with the smaller ones. It will reduce the tension, and you will receive a moral boost that its big enough for you to take the clearing challenge once more.
- Create a monthly budget
Just like we can’t live all day on bread and water, we can’t make caviar and lobster a daily expense either. The key is to balance what you WANT with what you NEED. Learn how to cut back on things in order to stay within the budget. Cancel some services that you don’t necessarily need. Eat a homemade soup instead of going out for Italian food. This will allow your budget to get a breather so that your credit card debts will be reduced.
- Renegotiate your interest
Most of the time, we end up in huge debt simply because the interest rates are just enormous. If you can lower your interest by at least one percent, that will save you a lot of cash which you can use to eliminate your debt.
- Transfer your rates
You can also transfer your rates to another account that offers 0% interest trials. They are temporary, but they will save you money in the long run.
- Plan an emergency fund
Credit card owners are used to spending money beyond their limit and will, therefore, find themselves lacking money exactly when they need it the most. In these situations, you may want to enter the habit of creating an emergency fund. This will help you in your times of need by acting as a buffer, so you won’t have to dive into credit card debts.
As you see, it’s pretty easy to pay off your debt if you put your mind to it. How would YOU handle your credit card debts?