Credit Card Debt?
Everyone who has or has had credit card debt knows how stressful and worrisome it is and getting rid of it can really come as a relief. But, the truth is, for many, it’s not as easy as it sounds.
Many times it is easier to get into debt than it is to get out of debt. But since everything in life has a solution, credit card debt is no exception. All it takes is a couple of strategies to get out of debt.
You must have something very clear, is that the control you have over your portfolio is essential to get out of debt. Your financial stability will depend on this. It is vital that you limit yourself as much as you can until you achieve the perfect plan to pay off your debts completely and achieve a credit discipline that not only helps you get out of debt, but also keeps you free of them.
Have you ever heard of the much talked about debt snowball?
The debt snowball is a well-known strategy that helps build momentum while eliminating credit card debt.
To make it even more effective use this short list.
-Make a list of all your credit card debt. Then sort by the size of your balance, from smallest to largest.
-Pay the minimum payment required on all your credit cards each month.
-If you have extra money available, pay it on the card with the smallest balance.
-Repeat each month until you have paid off the smallest balance. Celebrate that victory!
-Look at the new smallest balance: that’s your new goal. Pay any extra money toward this balance, including the amount you used to put toward the balance you already paid.
Do this as many times as necessary.
Over time, the amount you pay for each balance increases, as you are paying the minimum payment plus the amounts you used to pay to other cards. Your payments (snowball) until you are debt free.
Debt snowballing is a psychologically satisfying strategy because it provides a boost of confidence each time you pay off debt, creating a series of quick wins. And since you start with the smallest debt, it shouldn’t take too long to get that first win.
On the other hand, there’s: Debt avalanche, this helps you minimize the total amount of interest you’ll pay as you eliminate your debt. It is different from the debt snowball concept in that it is not so much concerned with the psychology of smaller quicker wins, but focuses primarily on minimizing the total amount of interest you will pay as you eliminate your debt.
The overall goal is to pay off your debt. While it may make mathematical sense to use the debt avalanche, it doesn’t make any sense unless you actually pay off the debt.
If you get discouraged and lose motivation or see that in your future, try the debt snowball instead.
There is a chance you can get a lower interest rate without moving your balance. If you are unsure about getting approved for a consolidation loan at an attractive rate, try negotiating with your current card issuer.
You might also consider contacting your card issuer and asking them to lower your interest rate. To improve your chances, highlight why the card issuer might benefit from working with you: your on-time payment history, your long-term relationship, or your improved credit score.