Tips on Paying Off Your Credit Card Bills
Are you having difficulties paying your credit card debt? In this article we’ll provide you with some very realistic and useful tips to help you get out of your debt worries.
Set a Goal
It can’t be stressed enough how setting practical goals to pay off your high interest credit cards as well as other consumer debt, can be beneficial to you. It doesn’t take much time to keep accumulating your debts, while it can be really challenging when it comes to paying them off (it takes longer to pay off credit card debts than to accumulate them). You have to show self-discipline and good management with the money to get through the difficult time. Continuously track your progress to help motivate yourself and to push on and reach your goals.
Freeze your cards
Freezing your cards is a deterrent measure to stop you from using your credit cards again and it makes sense. If you’re trying to get out of debt, you have to learn to stop using anymore credit. So say no to the credit cards until you’ve paid off all the outstanding balances. If you pay for your expenses with cash instead of credit cards, it’ll help you differentiate between your needs and wants, stay focused, cut on your luxury expenses and make you think hard as to how you spend your money.
Prioritize the Debts
Prioritizing your debts in order of importance can prove to be helpful in managing and paying off debts. Mortgage payments and vehicle payments are mostly at the top of the list crucial to your accommodation and transportation needs. But it’s also true that different people will have different priorities. Some will prefer to write off their highest interest rate debts first, while others would like to be done with their specific payday loans first. So you’re the best judge of your situation in this case, and may have to decide the order of your debts.
Related – Credit Specialists
Observe your spending pattern and cut down on expenses
A very good way to speed up your credit card debt settlement and get out of debt is by closely reviewing your monthly expenses and identifying the opportunities where you can save or cut costs. Begin tracking your spending pattern for a couple of weeks, and get an understanding of how you spend money and where it’s mostly spent. Making a cup of coffee yourself in the morning instead of buying a $3 specialty drink will save you over $1000 a year. Look for more ways to save out of your expenses.
A Monthly Spending Plan
Writing off credit card debts accumulated over a long period of time will require a change in your habits and lifestyle. Basically if you’re looking to get out of debt that will mean to stop borrowing from your credit cards again and again. Yes that’s right, you’ll need a monthly spending plan for your money. A monthly plan will make sure that you’re living within your budget and increase your ability to pay off your debts.
The Snowball Effect strategy
This method is all about improving the debtors’ psychology. The method involves paying off your debts in small balances first. This plays with your psychological in that it makes people realize that they’re actually making progress sooner. In turn this will motivate them to keep paying off their debt.
Switch Savings to pay off your debts
Almost everyone contributes to some kind of a savings plan, which is a practice followed since time immemorial and it’s rightly justified. But if you have some unpaid debts, you might consider using this money to help you pay off the money owed by you faster. After you’ve established an emergency fund and started saving for irregular expenses, you might want to suspend your savings’ payments and consider using the same money to pay off what you owe. People with no specific savings could really benefit from this practice.
Debt Consolidation Loan or Balance Transfer
Debt consolidation loans and balance transfers are very effective options to get you out of debt. You can consolidate your debts with a consolidation loan or transfer your credit card balances to a low rate credit card. You should carefully read the terms and conditions to get a clear sense of any hidden fees as well as the overall interest savings you may be subject to. When you apply for a debt consolidation loan, you should cancel or cut up on the usage of any credit cards to avert you from using them again until you’ve cleared your debt.
Refining The Mortgage
Chances are if you own your own home, you may have enough equity to consolidate all of your debts into your mortgage. In case you don’t have much equity in your home, acquiring additional mortgage insurance costs may be expensive. As with a debt consolidation loan, when debts are consolidated into your mortgage, it requires you to create a budget that allocates money to savings as there’s always the possibility of borrowing more when emergencies arise. You want to avoid doing that.
Pay more than the minimum
Go through your credit card statement and see the payment information chart. if it says that you’re only paying the minimum, you might end up in debt for a very long time. Aim to pay a little bit extra each month. Anything paid in excess of the minimum will make its way towards your balance – and the smaller your balance, the less you’ll have to pay in interest.
Look for possible liquidation options to lower your debt
Let’s say you’ve bought a car, a memory foam mattress, or a new jacuzzi, just put it into a perspective: do you really need these items, when you’re weighed down by debt? Liquidating these items can provide huge debt relief and help alleviate your hardships.