Get a Game Plan For Tackling Credit Card Debt
Having to tackle old credit card debt in your monthly bill payments can seem really burdensome. When outstanding credit card debt has been plaguing you for a while, it’s easy to feel overwhelmed by it or wish that you could just forget about it altogether.
However, when you make a solid game plan for managing your credit card debt and your current credit usage, you’ll feel a lot better about your ability to resolve your old payment issues.
Each step that you take in the right direction will give you more financial freedom and enable you to spend more on the things that you need now rather than the things that you needed in the past.
Keep a Close Eye on Your Credit Score
Your credit score is a good metric of how you’re managing your outstanding balances and monthly payments. In addition, you’re likely to see a change in your score when you’re able to use less of your available balance.
Furthermore, it could be the first way that you learn about an unpaid account going into collections, which may, unfortunately, have the effect of bringing down your score significantly.
Keeping track of your score helps you monitor your progress bringing down your credit card debt over time. The more you see your score improve, the more incentivized you’ll feel to keep up your good work.
Lastly, keeping your score low can help you save on your card charges in the long run. With a better credit score, you may be eligible for better card offers and interest rates.
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When all of your debt is paid off, use just one credit card to pay for items throughout the month that you can pay off. Then, get some cash back each month that you can use on impulse purposes or save to use on bigger ticket items like plane tickets.
If you can’t manage to have a balance of zero because of impulse purchases, then I recommend not keeping your credit card in your purse or to have the number saved in your computer.
You can freeze it, and only thaw it out to get the number when you truly need it for something that you can pay off in the same month.
What is the best way to get out of credit card debt?
When you’re making payments towards your card balances, your first instinct may be to try to put some dents in the highest balances.
Alternatively, you may feel inclined to wipe away the smallest balances first just to get them off your plate. Read some tips here on ways to tackle those small balances the fastest.
Another way is to prioritize paying down your balances based on the highest interest rates first. It makes sense to pay more towards principal charges than interest, and you certainly want to avoid accumulating any more interest than necessary.
Whatever way you choose, be sure to write down each card you owe on, the current balance, and how much you can pay extra each month.
Check Your Automatic Payments
Some of the things that you pay for every month may be set to automatically charge one of your cards. This can be a really useful tool for some people because it saves them from having to remember to make the payment.
In this respect, an auto-pay setting makes paying bills a little easier and it can help you avoid late fees. However, an auto-pay account that you’ve forgotten about when you’re checking out your balance could come as an unwelcome surprise.
As I mentioned earlier, be sure that every purchase you make using your card, is one that you can pay off that month!
What happens if you can’t pay credit card debt?
I will say that everyone has emergencies where you may need to use your card – especially if an unexpected car repair bill comes along. In that case, you may not be able to pay it off all in one month. If that is the case, take a look at your budget and be sure to re-allocate some funds that you can put toward that extra expense until it is paid off.
Why you should pay off credit card debt?
Bottom line, putting some thought into how you manage your credit cards and clean up your old balances can go a long way towards getting your spending in line with your goals.
You’ll have to stay organized and be a little disciplined, but your efforts will generate positive results. No longer paying money for interest will be a game changer and you’ll be pleasantly surprised at the extra money you have to spend each month.