A little laziness or ignorance can pent up a huge mountain of credit card debt in the blink of an eye. But dealing with the debt head-on and clearing the mountain takes a lot of time, effort, patience, and perseverance.
Though there is no standard plan to get out of credit card debt, you can choose the right approach for your case out of the multiple ways available out there. Another important aspect here is to stick to your plan no matter how bumpy the road is. Losing patience means losing the game.
Here we suggest seven ways for you to get out of credit card debt.
Assessing financial situations refers to creating a list where you jot down all you owe and the income you get per month. This assessment also needs to consider the interest rate applicable to the credit card debt. Also, list down the interest rates applicable to all the credit cards you hold or other kinds of debt you owe currently.
Looking at these details can help you develop a solid plan or realise the severity of your current situation.
Consider all the expenses you have to bear, such as rent, food, transportation, and others. Write it down against your actual income for a month. With whatever remains after deducting the essential expenses, you will have the money you can use to pay the monthly instalments. Now, decide on how much you are going to pay towards each of your debts.
Since you are now stuck in the paddle of credit card debt, you need to make mindful decisions on your expenses. Going cool on expenditure has brought you to the place you are right now. So, brace yourself and spend only on your necessities and not on fantasies, at least until you pay off debts.
Cut down on that fancy restaurant brunches, 7-star cafes, impulsive shopping, and long rides. This way, you save a little more than you think, and you can use it to pay a few extra bucks towards that credit card and shove off the burden on your shoulders.
There are tried and tested methods to pay off debts, i.e. you may choose to pay off the credit card debt with the highest interest rate first (Debt Avalanche method) or may relieve yourself from the smallest debt you owe first (Snowball method).
Based on how you like to deal with your debts, choose one of the approaches and stick to it until the end. Mind that it may take a little time to come out of its trap.
If you are sure that a lender is offering zero interest rate on balance transfer, go for it. If not zero interest, an interest rate half as that of your current card is favourable. When you transfer the balance from one card to another, you can finally breathe as the interest rate is low and that your total cost to pay off that debt is now reduced.
Read the terms and conditions related to balance transfer and understand the duration of the reduced interest rate. See if that is beneficial for you before you sign up for it.