Being stuck in credit card debt is a frustrating situation that many Americans find themselves trapped in. Getting caught in the seemingly never ending cycle of missed minimum payments and accruing interest can make the situation feel hopeless—but there is a way out. Consolidation Plus has found that, with a few lifestyle changes and a solid plan, anyone can work their way out of credit card debt, no matter how much money they owe. Instead of panicking and fretting over your credit card debt, take control with these tips from Consolidation Plus—and get started on the way to healthier credit score and more stress-free financial future.
Create a budget—and stick to it. The most important thing you should do when it comes to paying down your credit card debt is to build a budget that is reasonable for you to stick with in the long-term. Sit down one day with a cup of coffee and open up your credit card statement from last month, and budget how much money you’re spending a month vs. how much you’re bringing in.
This may include cutting out some expensive habits. Examine your budget and look for places that you can cut down on your spending; Consolidation Plus has found that some consumers don’t even realize how much they’re spending on their daily coffee, work lunch, or weekly pack of cigarettes. By cutting out expenses that you don’t need, you’ll have more money available to pay down your debts.
Stop swiping your cards. Charging too many payments on your credit cards is how you got into debt in the first place—piling on additional payments will do nothing to solve the problem. Many people find that when they use their credit card, it doesn’t have the same impact as seeing cash leave their wallets, causing them to overspend. Consolidation Plus recommends cutting up or hiding away your credit cards to avoid the temptation to continue to spend unnecessarily, and switch to cash and direct transfers for important purchases.
Consider taking advantage of a balance transfer. If you have a large amount of debt on a high-interest account, a balance transfer can potentially help you alleviate the constant piling-on of interest by moving your balance to an account with a lower rate. Many credit cards offer 0% interest rates for an introductory period of 12 to 18 months, but be careful to take note of the interest rate after this introductory period if you anticipate that you cannot pay off your remaining balance within this time—you may be left in a worse situation than you began in!
Make extra money on the side. If you can’t cut enough out of your budget to make more than the minimum payment on your accounts with debt, you’ll need to make more money on the side. Taking on a second job like waitressing or driving with a rideshare company can give you more money to throw at your debt and begin to reduce your balances.
If you have a talent and need to work from home due to children or other obligations, freelancing can be the solution to your debts. Sites like TaskRabbit.com and UpWork.com list a variety of small jobs ranging from coding to writing to graphic design that will transfer money safely into your account upon completion, allowing you to make money from the comfort of your computer.
Working your way out of debt can be a long and frustrating process, but it’s one that’s worth doing. Paying down your credit card debts will allow you to build up your credit report, which will lead to an easier time securing loans or being approved for lower-interest cards in the future. If you need help with your financial planning and getting out of debt, Consolidation Plus may be able to help—contact us today and get ready to start the road to a debt-free life.