Using credit cards is all fun and games… until the bill arrives. What seems like an innocent purchase here and there can add up fast. And before you know it, you have the weight of credit card debt sitting on your shoulders.
But getting out from under all that debt isn’t impossible. In fact, you can get rid of credit card debt with the right action plan. (And some self-discipline.)
Let’s look at 7 tips to help get rid of that credit card debt once and for all.
1. Know Where You Stand
The first step in tackling your credit card debt head-on is to know where you stand. To many, facing the actual amount you owe is difficult. But it’s necessary to get real with the situation so you know what you’re facing.
Make a list of each of your credit card balances. Also, include the APR and the minimum monthly payment due for each card.
Having the numbers there in front of you, in black and white, will help you move past denial and toward a plan.
2. Track Your Spending
Next, you’ll want to write down all your expenses. This includes your monthly mortgage, food, utilities, car payments, and everything else you pay on a monthly basis.
After that, include all the variable expenses you have like clothing, eating out, gym membership, etc.
Once you’ve completed that, take a look at where your money is going. Check if there are any areas you can cut spending, to enable more money goes toward paying off your credit card debt.
Can you stop eating out? How about cutting cable? Or are you really using that gym membership?
Or, if cutting out is too hard, trying cutting back. It may surprise you how cutting back here and there can start to add up to big savings.
Using online calculators are great in helping you do all the specialized calculations you may need to figure out where to cut corners.
3. Make a Budget
Now that you have identified your expenses and know where to cut back, it’s time to put it all into action.
Creating a monthly budget will let you know where your money will be going and how much you have to spend on each category. That way, you aren’t spending freely. You know where each dollar should go.
Divide the budget into weekly segments or bi-weekly to go along with paydays. Whichever one you will be able to follow easily.
And you have to have self-discipline with it. It will be tempting to spend outside of the budget. Just remember the end debt-free goal.
4. Lower Your Rates
Look back at that list you made of all your credit card balances and their APR’s. Those high APR’s are costing you extra money. It’s best to try to get those lowered to save money and cut your balances faster.
You can try calling your credit card companies and negotiating a lower rate.
Sometimes you can find a new credit card with much lower introductory APR’s on balance transfers (or even zero percent APR offers!). If you qualify for those, transferring some or all of your debt can save you a lot of money in fees. Especially if you can get a zero percent APR.
Just make sure you can pay off the balance before the introductory rate is over. If not, you will land interest fees that could cost hundreds or even thousands of dollars!
Or look at consolidating your debt into a low-interest personal loan.
5. Put Your Plastic Away
To help ease the temptation of using your credit cards, put them away. Don’t carry them around with you. Keep them in a place that’s not easily accessible.
Most people find it easier to spend money when using credit cards versus paying in cash. Because when you’re paying in cash, people tend to think about it more. You can physically see your money being spent.
So try to pay with cash whenever possible to keep yourself on budget. Carry around a set amount, and when it’s gone, that’s it. Don’t reach for the credit cards.
6. Boost Your Income
Cutting back your expenses always helps. But sometimes it’s not enough. Boosting your income for some extra cash can go a long way in helping knock down that debt.
Getting a second job or finding a side hustle is becoming more and more popular. Remote jobs you can do from your computer at home are becoming more plentiful. And can help when you need to be home after your full-time job is over.
Maybe you have an attic full of things you can sell. Using sites like eBay or Craigslist can help you earn extra cash by selling things you no longer use.
Or if none of those fit your needs, create your own source of extra income. Use a hobby to create things you can sell or by teaching someone a new skill. Offer to pet-sit or house-sit for friends and family.
7. Track Your Progress
There’s no motivation greater than seeing progress. So it goes to show, tracking your progress will help make it easier to continue toward a debt-free life!
Not to say you should be checking up on your balances every day. This shouldn’t take over your life. But check in every few months to see how things are going.
Keep a running list of your balances. Having the proof of shrinking credit card balances on paper can help you see how far you have come. Your efforts will not be in vain!
And always remember… it took you some time to get into debt. It’s going to take time to get out of it. Make sure you have yourself on a healthy timeline.
Knowing How to Get Rid of Credit Card Debt Will Take a Weight Off Your Shoulders
Credit card debt can be stressful. But knowing the right steps to take to get rid of credit card debt can set you on the path to financial freedom. And that can feel like the weight of the world taken off your shoulders!
Did you know decreasing your credit card debt will improve your credit score? Read more about how a credit score works.