People can get into debt for so many reasons, including emergency situations, serious ailments and unexpected job loss, etc. However, a majority of people fall into a vortex of recurring debt owing to improper usage of credit cards! It can be a slippery slope for some users who cannot fathom out the way to get rid of the debt, in fact. It can be intimidating for the majority, but it is not impossible to get out of credit card debt.
With proper planning and resorting to some measures you can step out of such debts. Below listed are a few simple yet proven methods to get rid of credit card debt.
When you are trapped in a deep vortex of debts caused by credit cards, taking a few immediate measures is helpful. These steps will help you get a breather.
Analyze your balances, fees and credit card interest rates, to begin with. This is helpful when you use more than one card. You need to have a clear look at the financial situation before you can resolve it. Go through the credit card statements and see which card has the highest rate of interest.
If you are dealing with several accounts, it is possible to transfer balance between them. Ideally, you should transfer balance from the card with higher transfer rate to one with reduced interest rate.
It is always easier said than done, but prioritizing credit card expenses does help when you are severely cash strapped! For example, cutting down on internet cost is possible if you switch to a lower bandwidth plan. Cutting down on dining out, drinking at bars is also possible. Use the saved money to pay off the due you owe to the credit card with the higher rate of interest.
You may also opt for debt consolidation. It means combining all your credit card debts into an accumulated payment. Choose a reputed debt accumulation service provider for this.
You can talk with your credit card company and ask them to lower interest rate. This may not be fruitful, always but you do not have much to lose anyway. If your credit score is decent they may eventually agree.
Long Term Measures
These methods do not bring results overnight, but if you implement and stick to them the end result will be positive.
You should start clearing debt to get rid of it. Simple as it sounds, this is effective to get rid of debts caused by credit card usage in the long run. Pay a minimum balance on every card you own and use.
You may also stop using credit card for each and every purchase. Sometimes, small expenses like recharges and grocery payments are better to pay off with cash than a card. Limit card usage for buying appliances, products that carry a hefty price tag. Use the card for paying monthly bills that are quite necessary, not all.
Try to use credit cards that offer added advantages like cash back and reward points. While you will find such cards in the market, find out which add-ons are beneficial for your needs! For example, some banks offer credit cards that come with points that can be redeemed against fuel usage or online shopping. This will help you eventually spend less for regular needs.
Where it all leads to?
For controlling credit card bills and getting out of debt, there is no magical solution. If you make some basic plans and adhere to them, the results are bound to follow. Slow and steady approach is the best way to improve your situation.
(The content is contributed by Subodh Jain)