Simple Plans to Get Out of Your Credit Card Debt
Eliminating credit card debt and handling debt requires determination and commitment. However, when you reduce your debt, you would be happy that you accomplished it and it would contribute towards your financial wellbeing. You can drive away your anxieties associated with debt repayment, as well. Following are some tips to help you with elimination of your credit card debt:
Tip 1) Make more than the minimum payment every month. Do you have any idea that the minimum monthly payment is typically 2%-3% of your balance? If you have a credit card balance of $3,000 and the minimum monthly payment is 2%, you need to pay just $60 for lowering that debt and the maximum portion of that would be utilized for the interest and not the principal. If you pay some extra on your necessary minimum payment every month, then you would be amazed to see how quick your credit balance reduces.
Tip 2) Discontinue using all your credit cards barring the one that offers the lowest rate of interest. You should not use that card if it is not utterly essential. Closing your credit card accounts might have an adverse effect on your credit score, therefore keep them in a secure place but don’t close the accounts.
Tip 3) Collect all your latest credit card statements. Take a pen and paper and put down the balance of all the debts and the corresponding interest rates charged. Starting with the debt that has the lowest interest rate, just make the minimum required payment.
Tip 4) On the debt that carries the highest interest rate, make the minimum payment along with any extra amount that you can manage. As soon as this debt is repaid, move to the debt that has the second highest interest rate and utilize the money that you were paying for the first debt to pay down the second debt. In addition, sum up the minimum that you were paying for the second debt and just go on paying the minimum outstanding for the other debts. Just go on doing this till the time all your debts are cleared up. This might require one or two years, however, don’t become demoralized. The sense of becoming debt free is truly invaluable.
This should be your checklist: -Make more than the minimum payments -Keep your credit cards in a secure place -Don’t get demotivated – Always remain encouraged.
At this time of global economic slowdown, countless numbers of people are plagued by credit card debt problems. Personal bankruptcies and credit card debt are at a record high and while it is quite simple to fall into credit card debt, coming out of it might be an extensive and difficult procedure. The aforementioned tips can help you a lot to handle your credit card debt.