How to Lose Credit Card Debt and Keep It Off
Don’t think you are alone if you’ve accumulated a bit of credit card debt that you just can’t seem to get rid of. Credit card debt can be a never-ending battle, with interest fees continually adding to your balance, making it even harder to trim down. But it’s never too late to get a handle on your debt and reach a point where you can start fresh and debt-free. Here are a few tips for battling the credit card debt blues.
Don’t Be in Debt Denial
Unfortunately, credit cards do enable people to go out and spend more money than they have. With a little piece of plastic, it doesn’t even feel like we’re spending money. But there is not some magic fund of money that our credit cards tap into. Every time you use your plastic, you also need to be able to back up the purchase with cold, hard cash. You might have made some mistakes in the past that pumped up your credit card balance, but you can at least be more cautious in the future.
Build Good Credit, Not Debt
Having a credit card in your name is one of the primary tools people use to build up credit. This is necessary for making big purchases, such as for taking out a mortgage for a house or financing a car. Unfortunately, some people build up credit card debt instead of focusing on building good credit.
From now on, do not charge anything to your credit card that you cannot pay off right then, or at the very least, with your next few paychecks. Credit cards can help us to organize our finances but they don’t have to complicate them. For instance, you might need to buy groceries before you get your paycheck, so you use your credit card to pay for them. Or an emergency might come up, such as having to take your dog or cat to the vet, and you don’t have the money right then. But you should always aim to pay off your purchases as soon as possible, rather than letting your balance continually grow. This is how you earn a solid credit rating: by charging purchases here and there and paying them off in a timely manner.
The Time Has Come for a Budget
Once you’ve racked up credit card debt, it’s time to sit down and make a budget. Make it realistic so you can stick to it as closely as possible. Include everything from monthly mortgage or rent payments, necessities, food and even cat food. Write it all down!
Limit your spending as much as possible as you pay off your debt. If you ever want to wave goodbye to your credit card balance, you’ll thank yourself later for saying no to the shoes you really want but don’t necessarily need. Once you’ve paid off your credit card debt, that’s when you can treat yourself once in awhile. In the future, try to limit yourself with luxury items, or purchases beyond necessities. Don’t treat yourself to a shopping trip until the bill from your last one is paid off.
Credit Card Fees in Your Pocket
You don’t necessarily want to be transferring your balance to a new credit card constantly, but transferring your balance from your current card to a new one could potentially benefit you. Balance transfer offers typically boast an extremely low introductory period on interest rates. It’s also important to check out the associated fees. If you find an offer that would save you money on interest rates and fees, you could transfer your balance from your current card. Then you’ll be able to focus more on paying off your debt, instead of racking up even more with the monthly fees credit card issuers tack on. Also, since balance transfer offers are honored for only a limited time, such as 12 months, it is added motivation to pay off your debt in that timeframe.
Even though you could potentially find a good balance transfer offer credit card and save some dough on interest rates each month, it’s important to also change your habits and stick with it. Once you get used to paying your bills on time each month and sticking to a budget, you’ll be well on your way to building up a good credit rating and dropping your debt. It will take some time but be resilient; you’ll be starting with a fresh with a zero balance before you know it.
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Paying your bills on time really cuts the extra fees and late charges. Great article!