Getting rid of credit card debt is not as easy as it sounds. When you think about it, these cards can be quite a temptation to get over. How can you stop using something that allows you to purchase things and avail of services even if you cannot pay for it now?
Well that is exactly how you got into trouble in the first place. The essence of credit cards will really get us into the habit of acquiring debt. They allows us to live beyond our means by giving us the power to purchase things that we cannot afford in cash. That habit is the complete opposite of wise financial management.
So if you really want to get rid of debt, you need to do more than just pay them off. You need to get rid of the habits that got you in that situation. That involves breaking old habits and developing new ones.
You begin by making the decision to stop using your credit cards. Of course, that is only effective if you actually do it. If you want to use it for the reward points, then make sure you have the cash on hand to pay for the bill as it arrives. But ideally, you have to stop using it altogether. That does not mean you close the account. It will have a negative effect on your credit score. Just keep it in a safe place where you will have a hard time getting it.
If you still have it, check the contract that came with your credit card. See which account has the highest interest and make sure that it has the least balance. If not, you may want to check the contract if balance transfers are possible. Research on balance transfer fees and other procedures involved. Find out if it will benefit your debt or it will only make things worse.
Paying for more than the minimum is also a good idea. If you stick to the minimum payment requirement, you could end up in debt for a very long time. Paying more than the requirement will decrease your principal debt amount further and not just the interest rate. When the next bill comes in, the interest amount will be smaller because a bigger portion of the principal amount was paid off.
Of course, this advice is only applicable to those who can afford it. If your disposable income (the amount left of your income after removing the basic necessity expenses), is big enough to cover more than the minimum of your debts, then this is something that you can do.
In the event that you are unable to afford this, then you need to look for a debt relief program that will help negotiate for a lower debt amount. There are many options for debt relief but you need to know if it is the right one for you - based on your ability to make debt payments. It is important to choose the right option because failing to do so can lead you to more debt than when you started.
Well that is exactly how you got into trouble in the first place. The essence of credit cards will really get us into the habit of acquiring debt. They allows us to live beyond our means by giving us the power to purchase things that we cannot afford in cash. That habit is the complete opposite of wise financial management.
So if you really want to get rid of debt, you need to do more than just pay them off. You need to get rid of the habits that got you in that situation. That involves breaking old habits and developing new ones.
You begin by making the decision to stop using your credit cards. Of course, that is only effective if you actually do it. If you want to use it for the reward points, then make sure you have the cash on hand to pay for the bill as it arrives. But ideally, you have to stop using it altogether. That does not mean you close the account. It will have a negative effect on your credit score. Just keep it in a safe place where you will have a hard time getting it.
If you still have it, check the contract that came with your credit card. See which account has the highest interest and make sure that it has the least balance. If not, you may want to check the contract if balance transfers are possible. Research on balance transfer fees and other procedures involved. Find out if it will benefit your debt or it will only make things worse.
Paying for more than the minimum is also a good idea. If you stick to the minimum payment requirement, you could end up in debt for a very long time. Paying more than the requirement will decrease your principal debt amount further and not just the interest rate. When the next bill comes in, the interest amount will be smaller because a bigger portion of the principal amount was paid off.
Of course, this advice is only applicable to those who can afford it. If your disposable income (the amount left of your income after removing the basic necessity expenses), is big enough to cover more than the minimum of your debts, then this is something that you can do.
In the event that you are unable to afford this, then you need to look for a debt relief program that will help negotiate for a lower debt amount. There are many options for debt relief but you need to know if it is the right one for you - based on your ability to make debt payments. It is important to choose the right option because failing to do so can lead you to more debt than when you started.
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