Help! My credit card debt is out of control!
Credit cards can be a great tool, if you know how to use them wisely. Unfortunately it can be all too easy to fall into the trap of buying more than you can afford and end up making minimum payments only, while never really paying it off. If you need help with your credit card debts, keep reading to learn how to break the heavy chain of credit card debts and learn how to use credit cards responsibly.
Stop Making Purchases with Your Credit Cards
The first thing you need to do is stop charging on your credit cards, especially the high interest ones. If you find yourself always going back to the credit card, then remove it from your wallet. If it isn’t there, then you can’t use it. Some people find it helpful to freeze their credit cards in a block of ice to keep them from using them. If you have to thaw out the credit card to use it, it will give you time to think about the purchase and decide if it really is necessary.
Pay More than the Minimum
Making the minimum monthly payment will not pay down your balance anytime soon. If you are just making your minimum payments, you would be surprised at how many years it would take to pay off your balance. Even if you can only do a little more than the minimum it will make an impact.
Spend Responsibly
Make a realistic budget and stick with it. Make sure that what you spend is less than the amount of money that you make. Keep track of how much you are spending and what it is for. Try to eliminate the things that are wants and not needs, such as eating out in restaurants or expensive new clothes. If you can save some money in one area, you can then apply that money to your debts, paying them off faster.
Pay Off Your Highest Interest Debt First
It makes a lot of sense to pay off the debt with the highest interest rate first and then the second and third and so on. That department store credit card that has 30% interest is costing you a lot more money than the 18% credit card. If you pay off the higher interest card first, it will free up more money to pay towards the next card and continue to make it easier to pay off your debts. Some people prefer to pay off the smallest balance first. It can make you feel good and motivate you to keep going when you see a zero balance on a credit card statement. Whichever approach you take you should feel good about yourself. The decision to get out of debt and sticking with it until the finish line is an accomplishment that you should be proud of.
A Consolidation Loan
If you have a lot of high interest credit card and department store debt, you may consider getting a loan from the bank so that you can consolidate all of your payments into one. You can save a lot of money on interest by doing so and it simplifies all of your payments into one easy transaction. Remember though that in order to qualify for a consolidation loan, you have to have a good credit rating and be able to afford the loan repayment amount. If you cannot qualify for a consolidation loan, there are other options available to help with your debt.
If you feel like there is no way that you can take care of all of your debt on your own and you need help, then contact our debt relief specialists at 4 Pillars Winnipeg. We offer free consultations and will go over your current situation with you and give you options to help you on the road to debt free living. Call (204) 201-2100.
