The only way to get back control of your finances is by eliminating this massive credit card debt. The good news is that with a little discipline, patience, and effort, you can pay down your credit cards and build your finances back up. Here are some good tips to help you get started on eliminating credit card debt.
Put The Credit Cards Away
The first step in eliminating your credit card debt is to simply put your credit cards away. Stop putting more charges on your credit cards. The amount of interest that is added to this debt is only going to make it even that much more difficult to pay off. Make a commitment to yourself and your financial future to stop using your credit cards. If you will do that you’ll be well on your way to getting your finances back under control.
Stop Making Minimum Payments
Did you know that by making the minimum payment on a $1,000 credit balance it will take you 8 years to pay off? Due to the high interest rate being charged to your credit card, the payment and the interest basically cancel each other out. You never get ahead, but the credit card companies love you. It’s how they make their money.
Sit down and make a budget for your finances that include making much higher payments to your credit card balances than the minimum only. A good place to start is with the credit card that has the highest interest rate first. When you get that credit card paid down, start with the next highest one. You can take the extra amount of money you have from paying off the first one to use on paying down the next one. Before you know it you’ll get things back under control.
Consolidate Credit Cards
If at all possible, take the credit card with the highest interest rate and transfer the balance over to the one with the lowest interest rate. What this will do is give you a way to reduce the amount of interest you’ll be paying back. It will allow you to pay more on the balance instead of paying more on the interest.
This will also allow you to pay more on your outstanding balances and eventually pay off your credit cards altogether. It would definitely be worthwhile to take a look at all your various credit card interest rates and determine if you can workout a plan like this.
Ask Your Creditors About A Lower Interest Rate
Get in touch with your credit card companies and ask them about getting a reduced interest rate. Many credit card companies will do this in order to keep your business. The lower interest rate will allow you to put more of your payment toward the balance instead of paying more in interest charges.
If you are thinking about simply closing all your credit card accounts before paying off the balances…don’t! Many credit card companies will penalize you for doing this by hiking up the interest rate if you close your account before having it paid off. It can also hurt your credit. Pay off the credit card and then close your account.
Set a budget to use in paying off your credit card debt. There is no better feeling than finally being free of credit card debt. By making a commitment and working your plan, you can do just that.
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