Credit card debt is remarkably common in America, and many people are buried under thousands of dollars’ worth of debt each month. But even when this debt feels most overwhelming, you can take comfort in knowing there are still strategies you can follow to pull yourself out from under it.
Here are some tips you can follow to reduce your credit card debt:
- Take inventory. Write down all the credit card debts you have, as well as their interest rates, to make sure you have an accurate idea of exactly how much debt you have. This will allow you to prioritize your debts based on interest rates and total balances.
- Get lower rates. The easiest way to save on your credit card payments is to negotiate lower interest rates with your creditors. Even by knocking off a percentage point or two, you could save hundreds of dollars as you work to pay off your debts. Call up your creditor and ask them — it is occasionally that simple.
- Get serious about your spending. Track all your costs and create a thorough spending plan, creating categories for spending and assigning an amount to spend within that category that will allow you to stay within your income. You’re likely going to need to make some sacrifices as you prioritize paying off your bills. That isn’t to say you need to go on a starvation diet, but you might need to go without some luxury items. After you have created the spending plan, be sure to track it. There’s no point in having a plan if you do not see exactly how it is working and this is only possible if you track what you spend at the point of purchase.
- Limit your card use. If you have a significant amount of credit card debt, you should try as hard as possible to avoid using your card to add to that debt. Take out cash, write checks or use a debit card instead, paying for items only with the money you know you have.
- Determine your strategy. Are you going to pay off your highest-interest cards in one big lump sum right away, or do you need a long-term, structured payment plan to help you get through paying off all your cards? Figure out what’s best for you and your financial situation. The best way to do this is to create a debt elimination plan. Use Money Mastery’s debt elimination software to do so, here.
For assistance in devising a credit card debt repayment strategy, contact the skilled financial team at Money Mastery today.