Credit Card Debt Management - How to Eliminate Deb

217479655

Credit Card Debt Management is essential in your quest of being debt free and getting back control of your finances. It is very common for Americans to have more than one credit card to their name. This plastic card has been so accessible to almost anybody and it has been considered as an easy to acquire, hassle free type of loan. Unfortunately, many have succumbed to the temptation of using this card carelessly. Resulting to a nation that is now suffering from overwhelming debt problems.
All citizens of the US should remember that if credit of any sort is not managed properly, it will ultimately lead to spiraling interest charges,[link widoczny dla zalogowanych], which will cause seemingly insurmountable debt woes. If you find yourself in this dilemma, here are some simple yet effective steps to take to manage your credit card debt and eventually eliminate it all together.
1. Make a thorough assessment of your total credit card debt
Gather all of your most recent credit card bills and statements. If you do not have them on hand, then check them online. All major credit card companies provide their clients with easy access to their online statements. These statements have complete and detailed information about your past and present balances and transactions.
Although it might be intimidating to see all your balances at one time, it is a necessary step to take if you are determined to manage your finances effectively. With the information available to you, create a spreadsheet where you would list down each card number,[link widoczny dla zalogowanych], total balances, the minimum monthly payments, interest rates/APR, and how much is left in your available credit.
2. Get all your debt into one account - debt consolidation
Among all your creditors, check which of them offer the lowest interest rate. If you think credit companies other than your current creditors offer a lower interest rate, it would be worth your while to check on that too. Once you have chosen which company will give the best deal, transfer all your balances into that account. Many major credit card companies offer promotions that will give you not only a lower interest rate but also a full year of zero interest if you transfer your other credit card accounts with them.
Although not all creditors will allow balance transfers,[link widoczny dla zalogowanych], try to transfer your credit accounts that have the highest interest rates. Transferring your accounts with high interest balances to a lower interest card will save you a considerable amount of money in the long run.
3. Prioritizing your monthly credit card payments
After you have consolidated your credit card balances into a few lower interest accounts, give priority in paying off loans that have the highest interest rates. Make it a habit to set aside at least twice the amount of its minimum payment monthly. It is advisable that you pay double of the minimum payment each month. Paying only the minimum, especially for high interest cards, will not help in your quest to be debt free in the soonest possible time.
This does not mean that you will neglect the balances with lower interest rates. For those balances,[link widoczny dla zalogowanych], you may pay the minimum payable amount monthly, but pay consistently. Defaulting on a payment will automatically increase the rates of your account. Prioritize paying off the balances of those with higher interest and try as much as possible not to make use of those cards. Use only the low interest rate cards if needed.
4. If you have savings set aside, these should be geared towards paying off your debt
It may sound unorthodox, but if you are having debt problems, instead of setting aside savings for a rainy day, whatever savings you make should be channeled towards paying off your credit card debt. Think of it this way: if you leave your money static in the bank, it earns an interest of about 0.5 to 2 percent per year. On the other hand,[link widoczny dla zalogowanych], you pay as much as 20% interest rates on high interest balances per month. That is a total of 240 percent money lost compared to 0.5% money earned. Imagine how much you get to save if you pay the total amount of your debt first before putting your extra cash as savings in the bank
5. Budget, budget, budget.
Cut back on expenses that you can live without. Think about what you spend on coffee from Starbucks, an extra pair of shoes that you do not really need, eating out, what you spend on trips or holidays. If you are knee deep in debt, you should eliminate these expenses from your budget. A mere 50 dollars that you can add up to your monthly debt payments will reduce the interest you will be paying for the next month considerably. If you are determined on being debt free and getting back control of your finances, discipline in spending plays a very crucial role to your success.
6. Stop using plastic and pay with cash instead.
This is the most important step in credit card debt management. The best way to be able to afford to pay the total balance of each credit card each month is to have a balance of zero. It might not be easy to just totally stop using plastic, which is such easy credit, but imagine how it would feel like to receive your statement one day with a 0-balance account. With ample discipline,[link widoczny dla zalogowanych], determination, and a little bit of sacrifices here and there being debt free may not be a distant dream after all.