If you are unable to pay all of your bills on time or in full because you have used credit cards for too many purchases, you need to make a plan needs to regain your financial stability. Getting yourself out of credit card debt can be a long process, but in the end, it will be well worth the steps you take in getting your debt absolved for good. Here are some tips to use when battling credit card debt.
Know Your Expenses
Write a list of all your monthly expenses and the dates they are due each month. This list will help you keep on track with your bills as you start whittling away at credit card debt. Find out exactly how much you pay out each month. If your income does not cover this amount, you will need to make adjustments by removing some of the luxuries in your life such as cable, internet, or cell phone service so the monthly expense amount goes down. You may also need to pick up an extra source of income by getting a part-time job. Once you are able to make more than you pay out, you can tackle your credit card debt.
Pay Everything In Cash
The only way you are going to get out of credit card debt is to stop using them altogether. Many people will freeze credit cards in a bowl of water to avoid the temptation of using them for frivolous purchases. You will need to give up all extras while trying to get out of debt. There will be no more eating out, no more trips to get coffee, and no more clothing purchases. Do your best to stop buying anything for yourself that you do not need to live. As you make money, put it in your bank and pay for all expenses via check. It will take a little getting used to, but stopping card usage is the first step in getting it paid off.
Start Making Payments
Whatever extra money you have each month as a result from dropping luxuries or gaining extra employment needs to be put toward paying your cards. Make your payments as soon as you get bills in the mail. Many people make the mistake in waiting until the due date to pay their cards.
If you pay your bill as soon as the next billing cycles begins, the interest will not be as high when the next bill comes in the mail because it is calculated using the balance on the card each day in the billing cycle and then averaged by the number of days in the cycle. This will shave off a little extra from the interest you will need to pay. Pay at least the minimum and pay on time to avoid late fees. As the minimums go down, add the difference you are saving each month to the payment for the card with the highest interest rate. You will be able to pay more and more as your other cards' balances go down.
To talk to a financial planning consultant, contact a company such as Peterkin Financial.