There are many people who just do not seem to care that much about credit card debt that they are carrying until it gets to a point where that financial obligation has become a problem that they can barely handle. If you are in a similar situation, or you have not yet gone deep in credit card debt, you need to know that debt in general (credit card debt especially) has become the biggest financial problems of this century. And if you feel like you are on the path to obtaining such debt, we will discuss some things that you may be able to do to prevent it. However, for many people out there, the damage is already done and what they are desperately trying to do is to fix their mistakes and pay off their credit card debt. As most of them find out sooner or later, paying off credit card financial obligations is far more difficult that you may think it is.
How tough can getting out of credit card financial obligations actually be?
Well, it really depends on many things. If you have barely gone over your credit card balance and you are able to quickly repay what you owe, you will be done with it fast and easy. However, if you fail to repay the money you owe in a quick manner and keep adding more debt, you may get to a point which can be extremely hard to come back from. So the difficulty of this task depends on your specific financial situation and your capability to cope with the troubles that you are going through. If you are normally doing a pretty good job at managing your budget, and getting in debt is an anomaly and not a usual problem, you will probably be able to regain your financial freedom quite fast. On the other side, if you have bad financial habits and are doing a poor job in financial management, getting in debt can only make your overall financial situation a lot worse. You may not be able to get out of it, at least not on your own and not without financial assistance.
How can you get rid of credit card debt?
There are different tools and methods that people use to get rid of their credit card outstanding balances. Using the right methods and tools may ultimately determine whether you would be able to pay off your credit card financial obligations or not. However, choosing the right repayment method is not the only thing that can impact the success of your credit card debt repayment end result. To be able to manage your repayments while still taking care of all your regular monthly bills, you would need to probably make some changes in the way you live. You need to understand that what you are trying to accomplish is not going to be an easy job. That means that you would need to put in extra effort to make it work, and to be able to ultimately regain your financial stability and get rid of all the debt that you are carrying. We are now going to give you some steps that you can follow, some methods that you can use to tackle your credit card financial obligations so that you would be able to get much faster and efficient results.
2 steps for paying off credit card debt
Stop minimum monthly payments and start paying an amount above the minimum
Usually, many credit card companies often advise their customers to only make minimum payments on their credit card balances. That can look like a good decision, since it will allow you to manage your budget quite easy, given that you will not have to spend that much cash on your financial obligations. However, that can only be a good option if you want to keep carrying your credit card debt forever. You see, by making only minimum monthly payments on your credit card balances, you are probably not even touching the core of your debt. You are most likely only paying the interest on the amounts that you owe, which will, of course, get you nowhere in the long run. In order to start reducing the actual amount of money that you owe, you would need to increase the amount of cash that you are throwing at these balances. Once you do that, you would quickly see the overall debt amount starting to decrease.
How to know how much to raise the payments?
It is actually quite easy. Just get the details of your payments for the past few months, see exactly how much money you have paid on interest and make sure to surpass that amount on your future payments. That way, you will be sure that you are not just wasting your money on interest while the actual debt amount stays untouched.
Prioritize your payments
Having a clear a repayment strategy will get you much better results than doing things randomly. By having a clear repayment plan, you would be able to significantly speed up your repayment process, get a sense of order and clear purpose, and will eventually be able to sustain that determination until there are no more credit card financial obligations for you to take care of. There are two main repayment methods that you can choose from:
From the highest to the lowest
With this method, you need to get the details of your debts and have a clear view of which credit card balance is the one with the highest interest rate. Once you have determined which that balance is, you would need to focus the bulk of your funds on that specific credit card balance. It may seem like a hard thing to do, given that this is the one debt that is most expensive. However, this is exactly the reason why it would be good for you to get rid of that financial obligation first. Of course, it would be a bit challenging, but if you make only minimum payment to all of your other accounts, while you are focusing the biggest sum on the highest interest rate credit card balance, you would be able to manage to do it. Once this debt is out of the picture, each debt that follows is going to feel a bit less of a challenge.
From the smallest to the largest
This method is a bit different. Here, you will not be focusing on the interest rate, but rather on the size of the debt amount. Again, list all of your current financial credit card obligations, see which of your credit card balances has the smallest amount that you need to repay and start from there. Following this method will allow you to quickly gain momentum as you will quickly see the first debt disappearing. From then, you will have the confidence to take things to the end. Once you are done with the smallest debt, keep repeating this strategy until there is not a single credit card balance left for you to deal with.