Credit card debt stinks.
Most of us aren’t immune to the evils of credit card debt. We experience it at some point in our lives.
We typically find ourselves in credit card debt when we don’t know any better (and don’t understand the cost of high-interest debt) and/or when we’re struggling financially for some reason. Some of us didn’t have enough saved up to weather long financial downturns and turned to credit cards to make up the difference.
When you finally wake up or get back on your feet and realize you need to pay down this credit card debt, depending on how much you have, it may seem like a pretty daunting task.
Here are some helpful tips to help you reduce your credit card debt and to help you avoid going into more debt in the future.
Coming Up With Strategies to Legally Eliminate Credit Card Debt
1. Listen to Dave Ramsey
Dave Ramsey will motivate you to pay off your debts. Period. He’s the man with the seven step plan that can really help you to kick your debt reduction plan in gear. He’s got a radio show and a daily podcast you can tap into.
2. Create a Credit Card Debt Reduction Plan
Credit card debt is typically the worst kind of debt we have in our liability portfolio. But there actually may be something worse in there. It’s good to have an overall debt reduction plan and see where your credit card debt falls into priority. Should you be attacking this debt first?
3. Know Which Credit Card to Pay Off First
Should you pay off the card with the lowest balance first or the one with the highest interest rate? Take the time to understand the difference and make the decision for yourself. If you only have a little bit of credit card debt it’s not going to make much difference. But for big balances, this can be worth your time.
4. Post a Debt Payoff Schedule on the Fridge
Where your stomach is, there will your mind be also (or something like that). Hyperfocus on your payoff plan by putting it front and center.
5. Think Twice Before You Cut Up Your Cards
Cutting up the cards and swearing off credit for good works for some people, but not me. I’ve found a positive side to credit cards. And really think hard before canceling your credit card account. This can negatively affect your credit score.
6. Consider Getting Help for Your Credit Card Help
If you have tried everything and still find yourself struggling to pay off your credit card debts, then I encourage you to turn to the right people for help. The credit counseling industry is full of scammers and fraudulent people. Avoid these types by going to the National Foundation for Credit Counseling and seek out one of their members, a Consumer Credit Counseling Service.
Or, you can enlist the services of the Pay Off Debt app to help you get rid of your credit card debt.
Taking Action to Legally Eliminate Your Credit Card Debt
7. Pay Off the High-Interest Balance First
If you’re number cruncher, consider paying off your debts by tackling the card with the highest interest rate first. Then, move to the next highest interest rate card. This will help you pay less in interest over time.
8. Pay Off the Smallest Balance First
If you need to be motivated by a quick win, consider using the debt snowball approach. Build upon your small victories and destroy your credit card debt one at a time starting with the smallest. There’s a big psychological advantage to using this plan of attack.
9. Put Your Credit Cards On Ice
Literally, put your credit cards in a cup or bowl of water and place it in the freezer. You’ll still have the card(s) for emergencies, but you won’t have it with you at the store or have it readily accessible for online shopping.
10. Eliminate Other Expenses
If you’re saying you’re not able to make your credit card payments but you haven’t yet gone hardcore frugal, then I have no mercy for you. Determine the minimum level of spending you need to give your family food and shelter. Then, eliminate all other expenses. With this new found money, you should find it easier to pay down the balances on your credit cards.
11. Become a Freegan (Kidding…Sort Of)
Along those same lines, consider becoming somewhat of a freegan (a person who tries to use only free products and services). You don’t have to change your entire life forever, but it will surely help to get rid of debt if you can devote most of your extra income to debt reduction. Using free products and services only will help you do this.
12. Sell Your Junk
Odds are that at least some of your credit card debt is made up of things just lying around your house that you don’t use anymore. To speed up your credit card payoff schedule, bring in some extra cash by selling your stuff on Craigslist, Facebook, eBay, or a site like Decluttr.
Also, consider having a garage sale for even quicker cash.
13. Increase Your Income
If you don’t have junk to sell and you’re serious about reducing your debts, then consider taking on a second job or find a way to make extra money to really help with your finances. Use the extra funds towards reducing your credit card debt much quicker. Once you’re done, you can drop the second job. If you get a bonus at work or find some unexpected money somewhere, also use those funds towards your debt.
I encourage you to take a look at some of my money making interviews and also exhaust every other resource you have for coming up with other income ideas. Take these extra earnings and use them to pay off that old debt.
14. Call Your Credit Card Companies to Negotiate a Better Rate
If you don’t mind staying on hold on the phone for a while, call up your credit card company and talk to them about lowering the interest rate on your card. By lowering your interest rate, you’ll be lowering the amount of money your credit card company is adding to your debt each month. All this takes is a few minutes of your time. The worst they can do is to tell you no.
Tips: Have a competing card in mind when negotiating. If they resist, tell them you are likely going to switch to using a different card and just pay this one off. This will likely get your rate lowered.
15. Transfer Your High-Interest Balance
If your balances and interest rates are big enough, consider transferring your credit card balances to a card with a 0% promotional interest rate. Be aware of transfer fees, which might negate any interest savings you experience. Also, be careful not to use this new card as an opportunity to spend more.
While this doesn’t eliminate your credit card debt, it does help you decrease the balances; all while paying less interest. This isn’t a method that should be used by the undisciplined, but it can be a wise move. You can move the debt that is on a card charging high interest to another credit card that will actually not charge you interest for a certain period.
The only reason I mention it is because I did this myself back in 2002 when I was paying off my own credit card debt.
16. Obsessively Track Your Spending
Are you obsessed with controlling your spending? Maybe you need this extra motivation to help you avoid future debt, and to provide extra room in your budget for fast debt reduction payoff. Track your spending with a software like Personal Capital, or consider a zero-based budget.
17. Track Your Debt Reduction Progress Visually
Once you have started implementing your plan, make sure it’s written out and displayed somewhere in your house for you to see every day. Be sure it reflects your progress as you start to pay off your credit card debts.
You might also want to put something in your wallet with your cards if you haven’t already put them on ice.
What have you struggled most with in paying down debt? Any other strategies that you have found to be effective in finally getting rid of your credit card debt?
Originally posted on: https://ptmoney.com/legally-eliminate-credit-card-debt/
Published: 08 Aug, 2017 By Philip Taylor