Essential steps to pay off your credit card debt
If you have multiple credit cards or even one credit card for that matter, you know it is extremely easy effortless to manage your way into debt. Credit cards allow consumers to spend money that they do not have. Debt is a horrifying situation to get yourself into and having a tremendous amount of debt is intimidating when you are trying to pay it off. You’re constantly wondering how you are going to finagle your way out of debt and hopefully keep yourself out of debt after paying it off.
Create personal financial plan
The first step to managing your debt is to create a budget that is sustainable. List out your monthly expenses (i.e. rent, groceries, monthly bills). Add up those expenses and then deduct them from how much you earn in one month from work. After doing this it will give you a better sense of how much money you can spend on your debt. By having an organized list, it can help you negotiate your debt. It will also give you a visual on how much money you have and how much debt you’re in that will make it easy for you to understand.
Determine which credit card is important to pay first as per interest rate
The second step in consolidating your debt is to make a list of your credit cards with the credit card with the highest interest rate being first and the credit card with the lowest interest rate being last. This will help you keep focused and it will help you prioritize your debt. You should pay the minimum on each card every month and then put extra money towards the credit card with the highest interest rate. Once that credit card is paid off then you can cross that card off your list and pay extra money towards the next credit card on the list. You should repeat this cycle until each credit card is paid off. If you get bonuses at work, then you should put those bonuses towards your credit card debt instead, of spending it on things you don’t need.
Pause on using credit card
You should pause on using your credit cards while you pay them off. This will prevent you from having further debt by not spending money you don’t have. Instead focus on paying your debt off rather than digging yourself a deeper hole that could be merely impossible to climb out off. If you’re an avid online shopper, then it would be wise to clear your credit card information. Some online stores save your credit information so it can be easier when you check out. But if you clear that history it will actually be more tedious to online shop so it will make you rethink about what you are about to purchase and maybe make you realize that you probably don’t need that item. Which saves you more money!
Sell unused items for extra cash
Another easier way to get some extra loot is to sell your unused items. That book shelf collecting dust in the basement could be useful to someone else and it will help you receive extra cash in your pocket to pay off your debt. You can sell your unwanted items on Amazon, eBay, Craigslist, or the mobile app Let Go. Let Go is essentially an upgraded Craigslist and it is more mobile friendly than Craigslist. Your items may have a better advantage and quicker time being sold on Let Go vs. on Craigslist.
Change bad expensive spending habits
Last but not least, you should change your spending habits and start saving money. When you have money saved up it will help prevent you from going into debt and spending money you do not have. Once you come to the realization of what you really need vs. what you want and can live without, then it will make saving money a little bit easier. After paying off all your debt you should reward yourself with a nice camping trip rather than spending a bunch of money on a vacation. Or you could buy things that you have been wanting for a while like a couple new outfits, a television or maybe even that coffee table you have been eyeing for a while.
Credit cards can be a gateway to getting into debt if you are not good at managing your money. If you are going to get a credit card to build credit you should always make sure your minimum is low and affordable if you ever do max out your credit card so you can pay it off without it being that much of a hit. It’s always a better idea to save money though, you don’t want to always rely on a credit card because what happens if a credit card company goes out of business? Although it is highly unlikely, there is still a possibility it can happen. Hopefully these tips were helpful for you!
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