If you have credit card debt that keeps you up at night, it may help you to know that there are millions of people in your situation. But that does not mean that you should stay in that group. Learn how to use your credit cards wisely and you can get rid of that debt, boost your credit rating, and save money too.
Here is what you need to do to most quickly pay off your credit card debt. Although there are some who suggest other ways of paying off your balances, this one is the one I recommend. List your credit cards from the highest interest rate to the lowest. Determine an amount, in addition to the minimums for each card, that you can pay each month. Add that to the card with the highest interest rate. Let’s say you are paying $50 on that card. Once that card is paid off, add that $50 to the minimum payment on the next card. Continue until you get to your last card and pay it off.
Even if you pay off your debt every month before being charged any interest, you should ask for a lower rate from each of your credit card companies. Even if you do not have good credit, you should ask for a lower rate. The worse that your company can say is no, right?
Next, use your savings to pay off credit card debt. In most savings accounts, you are currently making very little interest. However, credit cards charge very high rates of interest. Don’t completely clean yourself out-you should keep enough in your account to handle emergencies, but if your debt is growing, try to pay it off quickly, even if you have to dip into these savings.
Of course, it is just as important to stop charging more on your cards while you are paying off your balances. There may be times when you need to use one, but cut out the impulse purchases. Paying with cash makes you less likely to buy something, because you feel the impact immediately.
Because the cash is not physically leaving your hands, it is easy to ring up a large bill without realizing it. Don’t let your bill surprise you at the end of the month!
Another option for getting out of your credit card debt is getting a home equity loan. The interest rate for a home loan is a lot lower, and the interest is tax deductible. It is important not to start using your credit cards again once they are paid off, or you will end up in the same situation, but this time without any solutions.
Even though many people are deep in credit card debt, every day, more and more people are waking up and resolving to get out of debt for good. Once you get rid of your credit card debt, you will have taken a major step in improving your financial future, and that will benefit you and your loved ones.