Are you drowning in credit card debt? Does it feel like there’s no end in sight? Well, the good news is that you aren’t alone. The bad news is that you don’t have much time to waste.
Credit card debt is a huge sore spot for millions of Americans. While there was a bit of a dip in borrowing from 2008-2012, things are getting out of hand again. Revolving debt has surpassed the $1 trillion mark for the first time since the Great Recession, and the data is a little frightening. According to CreditCards.com.
From a larger economic perspective, these trends are alarming. Combined with increased debt in other areas – including home mortgages and auto loans – it’s possible that we’re in another bubble that’s about to pop.
Believe it or not, you can get rid of your credit card debt. But in order to do so, you need a plan. The following tips will help you get on track.
There are a number of methods you can use to get out of debt – and we’ll discuss a couple of them in the following points – but it’s impossible to make any progress without a budget.
A budget helps you see exactly how much money is coming in and going out each pay period. If this is your first time creating a written budget, the numbers will probably surprise you. But once you cut away the fat and strip out the unnecessary expenses, you’ll see that you have plenty of room to start paying down debt.
The avalanche method is one of the first suggestions personal finance experts make for those considering paying off credit card debt. It involves ranking your debts from highest to lowest interest rate and paying them off down the line. The idea is that you get rid of the loans that are costing you the most first.
While less conventional, other people prefer the snowball method. In this method, you rank your debts from smallest to largest. In other words, the credit card with $200 would go first, the card with $3,000 next, and the card with $5,000 last.
The rationale here is that people are inspired by seeing results. When you move from smallest to largest, you knock out out debts faster. This gives you the motivation to keep pushing through until you only have just one or two debts left. (At which point, you have the confidence that you can win.)
If you have a bunch of different credit cards and debts, you’re likely discouraged by how fragmented your payments are. Getting an installment loan can bring some organization to the chaos.
“An installment loan allows you to consolidate multiple types of debt, including credit cards, medical bills and other types of loans,” RISE explains. “Installment loans have a set payoff date—ranging from a few months to a few years—and let you make monthly or biweekly payments. Installment loans range from a few hundred to several thousand dollars.”
It’s easy to slip back into your old ways of putting charges on your credit card. Self-discipline will only take you so far. At some point, it’s helpful to get some accountability from a friend or family member. You may even give them the permission to view your account statements every so often.
What would life be like without credit card debt? Imagine the freedom you’d feel. Think about how much extra money you’d have in your budget each month. Amazing, right?
Most people don’t tackle credit card debt because they’re afraid of the sacrifice and discipline it’ll require. But if you’re willing to roll up your sleeves and get dirty, you can kiss debt goodbye and enjoy life.
If you are interested in even more business-related articles and information from us here at Bit Rebels then we have a lot to choose from.
Renting out a spare room can be a fantastic way for homeowners to earn extra…
The gaming industry continues to evolve, offering exciting experiences for players worldwide. One such experience…
The growing prominence of digital currencies comes with an undeniable need for robust security measures.…
In today's highly competitive UK property market, developing a distinctive personal brand has become essential…
We all live in a world where first impressions are everything! Have you ever walked…
Are you interested in investing in precious metals but unsure how to manage the ups…
