How to get rid of credit card debt is definitely one of the most common questions these days. That makes total sense since it directly refers to probably the biggest financial issue of our time – credit card debt.
Why is it such a big issue?
For many adults in the United States, as well as in most parts of the world, credit card unpaid balances have become a major issue.We live in a time where the living costs are always on the rise while the level of income stays fairly the same. That alone can make things pretty hard and therefore, many people are finding it rather hard to manage to pay even their regular monthly bills. Another reason is the individual human factor, which is basically the way people manage their budgets. If you are doing a poor job at managing your budget, you do not really need any additional financial difficulties like unexpected emergency expenses and an unstable economic environment in order to find yourself carrying multiple credit card financial obligations. And then, there are unexpected challenges that life sometimes offer. This is why there even hardworking people with good jobs, stable income and good budget management are also carrying multiple credit card balances. This is mainly due to unexpected financial expenses. One can never be absolutely ready for such challenges, and even those who have created safety funds often find it too difficult to manage to pay such expense all on their own.
How to get rid of credit card debt?
There are many different ways that a person can get rid of credit card financial obligations. However, the goal is almost always the same – to pay off all that you owe, and to do is as fast and easy as possible. There are lots of different methods and steps that you can take. In fact, every person’s financial situation has different and unique specifics, which basically means that different repayment methods and strategies will have a different effect when used in different financial circumstances.
Do not fool yourself
If you are looking for some quick fix method or strategy for paying off multiple credit card balances, you are not in the right place. Paying off such financial obligation is never easy, and as we have already mentioned, it is different for everybody. However, regardless of your specific financial situation, getting rid of such debt is always going to be a tough challenge. So before you even consider using a certain strategy, financial tool or a method in order to repay what you owe to your creditors, you must fully understand the seriousness and difficulties of this task.
Combine different tools and strategies to optimize your final results
If you want to get rid of all the credit card debt that you are carrying, it would be for the best if you not only implement certain repayment methods and tools, but also make some small and some drastic changes in the way you live and especially in the way that you manage your finances.
Why is it important to improve your budget management
First of all, if you are carrying multiple credit card financial obligations, then there is probably something more than bad luck that has led you to this place. Many people are doing a really poor job with their financial management without even realizing it. Even if you do not make the necessary changes, you may still be able to get rid of your current credit card balances. However, it is highly likely that you will end up in the same situation sooner or later. However, if you do manage to improve your budget management, get rid of some bad habits and learn a few tricks along the way, you may be able to actually sustain a debt-free life.
Methods for paying off multiple credit card financial obligations
Before we discuss two methods that you can use to get rid of your credit card obligations as quickly and easily as possible, we have to discuss one of the biggest mistakes that people who are struggling to repay their credit card balances are often making.
Stop making only minimum monthly payments
You may have heard that paying just the minimum on your credit card balances is the way to go. It is definitely not. Many credit card companies are often advising their customers to do just that, with the idea that when they make only minimum payments on their credit cards, these payments will not really be that much of a problem for them. However, what they often fail to mention is that by making only minimum payments on your credit card balances, you are only barely touching the actual debt and you are mostly paying interest. By paying only interest, you are not actually reducing the amount of money that you owe – you are just stopping it from increasing. If you want to get rid of the debts that you are carrying, you would need to start paying an amount that surpasses the interest rate. That way you will be able to actually start reducing the size of your debts. If you are not really sure what is the right amount that you should be paying, get the details of your last few payments, see exactly how much you have paid on interest and simply makes sure to exceed that amount in your future payments.
Two repayment methods for faster results
With credit card debt repayment, you would need to have a certain strategy and follow a plan. However, most people are just paying what and when they can without really putting that much thought into it. This is dramatically slowing down their repayment process. Here are two methods that you can use in order to enhance that process:
The snowball method
With the snowball method, you would need to list all of your current credit card financial obligations, determine which of your balances is the smallest and start from there. By attacking the smallest debt amount, you would be able to quickly get rid of that obligation, which will basically allow you to reduce the number of credit card balances that you need to pay off. Doing so will not only give you momentum, but it will also give you enough confidence to keep fighting until you are finally free from your debts.
Highest interest rate method
With this method, you need to list all of your current credit card debts and determine which has the highest interest rate. After that, what you would need to do is to focus most of your funds and attention on that particular credit card, while making only minimum payments to all your other credit card balances. Once you are done with the highest interest rate financial obligations, you will find it a bit easier to deal with all the ones that are left.