Grrrr…. Credit Card Debt…. You’ve got it, it’s like a tick that keeps sucking the blood from your bank account. I’m writing in jest. Credit Card Debt isn’t the end of the world. It can however make your life very difficult if you don’t manage it well. Why is it such a big deal? Mostly because the amount of interest most people pay on their credit cards is 10-25% and if you only pay the minimum payment it can literally take you 20-30 years to pay off. Ouch!!!
Here’s are some useful tips to get out of credit card debt. It’s all about your habit around credit cards.
1. Stop using your credit card
The first step to getting out of credit card debt is to stop using it. I’m not saying you can never use your cards again but for the time being we need to stop the bleeding. A lot of people get in to a little bit of debt and then a little bit more and then eventually they feel like they are drowning and don’t see a way out. That’s not a great place to be. Stop while you can and pay cash only for a while. By paying cash for the things you need you will create a good habit and stop the damage of your credit cards to your bank account.
2. Start paying back more than the minimum payment
With any money left over after you’ve paid cash for the things you need direct as much of your excess funds to paying over the minimum payment on your credit card. Get in the habit of this and it starts to feel good to see that credit card debt disappear.
3. Use your credit card and payoff monthly
Once you’ve paid off your credit cards it’s time to start using them again in a smart way. The best way to do that is to take your monthly budget spend as much as you can on your credit card, make sure it’s a credit card that offers cash back or points towards stuff you want, and pay it off every month. Do not let the balance revolve. That is not the point.
Doing this will have you making money from your credit card usage with no interest fees. How cool is that. As a bonus, this will help your credit score go up, up, up.