The harsh reality of credit card debt is it doesn’t just ruin your credit score. It can ruin your life. That might sound like a bold statement, but it is true. Spending more than you can afford is the easiest way to not only ruin your financial health but also your emotional and physical health as well.
Have you ever seen someone with large credit card debt? This person does not look good. Not only are they mentally distraught by their bad decisions, but they are also affected physically as well. Their credit card debt not only hinders what they can do, where they can go, but it is always on their mind and they bring it up often and at great length when out with friends. No one wants to be like this.
If this description sounds like you, you are probably looking to fix your financial problems and figuring out how to get out of credit card debt fast. There are certain actionable steps to take in handling your debt, but they all require sitting down, educating yourself about your debts, and addressing the problems head on.
The Debt Snowball
Getting rid of credit card debt isn’t easy. The debt snowball is a strategy used to reduce and eliminate all of your debt.
Here’s how it works:
- Make a list of all your credit card debts
- List the creditor, the outstanding balance, the monthly minimum payment, and interest rate.
- Find the sum of your entire minimum monthly payments due. Pay this exact same amount month after month and as you pay off debts distribute the amount from the debts that have been paid off to your other existing debts.
This works because you are gradually decreasing the minimum amount due on each credit card and using the additional money to pay off existing debts at an exponentially faster rate.
Credit Card Debt Consolidation
Another approach when getting rid of credit card debt fast is debt consolidation. You can seek out a debt counselor who can help you consolidate all of your credit cards with their varying payment plans and interest rates into one monthly payment with a single payment and interest rate.
Debt Balance Transfer
If your interest rates on a card are too high you can seek out a card with a 0% promotional interest rate and transfer the remaining balance on your high interest cards to the new card. One thing to be cautious of are any balance transfer fees the new card might charge you as these can negate any savings.
Prioritize Your Bills
If you are in desperate need of a small moral victory, pay off your smallest bill with the lowest interest rate first. Experiencing how good it feels to pay of a single bill will motivate you to keep going.
Likewise maybe it is more in your nature to want to get the heaviest load off of your shoulders first. In this case concentrate on paying your largest bill first.
Make Adjustments to Your Lifestyle
Finally, make adjustments to your lifestyle. Although you might be paying down debt, you could be accruing it on other cards and in other ways at the same time. This will put you in a holding pattern that you will most definitely want to avoid.
In this situation, you want to take the necessary steps to assess your costs of living, make adjustments where necessary and eliminate any unnecessary expenses until you have paid off your current debt.
Track your spending for an entire month for rent, utilities, transportation, entertainment, and non-essential maintenance like weekly manicures or excessive purchases of clothing.
These are just some of the ways that you can get out of credit card debt fast. The first step is always finding the approach that bests suits you, sticking with it and seeing it through to the end.