It is very easy to find that your credit card debt has spiralled out of control. Using a credit card can be a great way to build up your credit file and this will have benefits if you need to get a loan but unless you are careful with them and use them wisely you might find that you end up in a lot of debt and be on the way to serious financial difficulties.
Signs That You Are Headed Towards Credit Card Debt
There are some ways that you might be able to tell that you are heading in the wrong direction and if they mean anything or ring any bells then it might be time that you got some help with your credit card debt.
- If you are using your credit card for normal basic needs because you have no other source of money then you might need to consider your options.
- If you are transferring balances on credit cards because you can’t afford the payment.
- If you have missed the odd payment because you haven’t the money.
- If you are ignoring the credit card statement because you can’t face the information that it is holding.
- You are putting more money each month onto the card than you are paying off.
- You haven’t planned for the emergencies in life and have no savings.
- You have no idea how to get out of debt and you hope that a solution will come to you.
- You are using your credit card to buy expensive items that you just can’t afford but everyone else has got.
- You have accounts that you haven’t paid any money on and they are now overdue.
- You have credit cards where you have maxed out the limit and you don’t know how to pay them off.
How to Pay Off Credit Card Debt
It can be a scary situation that you are in but it is possible that you are able to pay off any credit card debt. You will need to formulate a plan, know that it is going to take time and dedication to see it through and you will need to be disciplined so that you do not add any more money on to any credit card.
You need to know how much money that you can afford to pay each month on top of your monthly minimum payments. They only way that you can work this out is to formulate a budget. You need to know how much money that you have got coming into your account each month and the amount of bills and expenses that you have going out. Hopefully there is a positive difference between these two figures. If there is then this is the money that you are going to use to pay extra to your credit cards each month.
If it is a negative number then you are going to have to find ways in which you can cut money from your budget, you might need to get a second job to help with this.
Who to Pay First
It is important that on all your credit cards that you are paying the minimum amount and this should be included in your monthly budget. This is about the extra payment money that you have got and how you are going to allocate this.
There are two options you start with the highest interest rate and the largest debt. This will be the best way forward because it will mean that you will pay back less money over time because of the interest that you will have avoided paying. But this method can seem very de-motivating because you will want to see results and they won’t be as obvious.
The other option is to start with the lowest balance because you will see results quicker and it will keep you motivated to achieve the goal of being credit card free.
When you have decided the method that you are going to choice you need to write them down in the order that you are going to pay them. This will mean that you will be able to track the bills and you will be able to see the amounts that you owe going down.
Each time that you pay off one of the debts you move to the next one on your list and pay all the money to the next debt, until you have finally paid off all the debts that you owe.
It is not going to be a quick fix, it is going to take some time, but you will need to have the determination to see it through to the end. At which point you will have more money each month and you won’t have any credit card debt to worry about or to pay. Once you have reached this point it is important that you are able to avoid putting any money on the credit card unless you have the money with which to pay it off directly.