Having credit card debt can really put a strain on your finances. Not only are you trying to pay back the balance that you have charged up, but interest as well, and can take up a large chunk of your monthly expenses. While you may not be thinking budgets are sexy, but they sure can help if you need to free up extra money each month in order to pay down debt. If you have been putting off your finances up to this point, now is as good of time as every to get out of debt and have your financial freedom.
Set a Plan
The first step in your new quest to become debt free starts with a plan. That can be laying out the accounts you need to pay off, in what order you want to tackle them, and how you are going to do it, whether that is how much per month and how long it will take you. Sometimes paying off the smallest account first can actually help provide motivation to continue on, as large balances will take longer and may not see any impact right away.
Free Up Extra Money
Making the minimum payments will do little to the balance other than cover interest and could add years to your payoff, so larger payments need to be made in order to really chip away, but that takes extra money, so a good place to free up extra money each month could come from reducing expenses, whether that is avoiding going out to eat and opting for grocery shopping instead or getting rid of cable and going for a streaming service or two for a fraction of the price. This could add up to hundreds of dollars saved per month to put towards any outstanding debt.
Try a Balance Transfer or Loan
When your carryover a balance to the next month, interest is tacked on, and depending on the interest rate of your card, let’s say it’s 16%, could significantly add to the monthly payment, so it might make sense to do a balance transfer to a new card with a promo of 0% for a period of say, eighteen months and really save on interest and have a payoff in sight. Just watch out for transfer fees, but probably still would be lower than interest. You could also do a debt consolidation personal loan that may have higher interest rates, but could be spread out over a longer period of time for a lower monthly payment.
Stick with It
When it comes down to it, making sacrifices, having patience and discipline may not be easy, but it will be worth it in the end when it means living debt-free and finally not having to worry about paying back, plus, interest of what you charged, and can now focus on using that extra money to building up other areas of your finances such as an emergency fund or increasing contributions to a 401k account in order to build your nest egg for the future.