How to Handle Credit Card Debt

"How to Handle Credit Card Debt"

Do you want to start a clean slate with your credit card debt? Now is a perfect time! Having a massive credit card debt can be burdensome and stressful. The new year is the best time to get your credit card debt under control for keeps. For some, this can be a real problem, but with the right discipline and mindset, you can get it over and done with fast.

If you have bad credit, you may have trouble getting a loan unless you apply for a payday loan. These types of loans are typically mroe expensive, so it is a good idea to get your credit rating under control in order to get better rates on loans.

Know the Root Cause

Many people suffer from credit card debt because they own several credit cards. All of these cards bear various credit interest rates and this is where your problem begins. The more credit cards you have, the more stressed you will become. Do away with the stressor and focus on what truly matters starting today.

How Much Debt is Too Much?

If you want to bid goodbye to credit cards for good, then you have to sit down and determine how much exactly you have. We suggest you gather all the data and information in a piece of paper and take a good look at your finances. Have the resolve to end all of your debts as soon as possible.

Make Steady Repayments

It is crucial that you make steady repayments of your debts. Make it a habit to pay them off as much as you can every single month. This practice will help reduce interest. It is very important that you pay at least the basic monthly dues or suffer the late or default charges that can compound very fast.

You can take advantage of a direct debit process to ensure there is money sitting in your account when payment becomes due. Overall, if a direct debit fails, the default charges will be added to your account.

Make Your Debts Your Priority

For those who have several debts, start settling each one of them one by one. It may be tough at first, but when you are able to do so, you will get off the debt trap real fast. You can do the following to easily settle your debts:

Cards With Highest Interest Rates

If you are planning which card to pay first, then we recommend you focus on the ones with the highest credit card interest rates. This one is sure to cost you more, so better to settle it real fast. When you pay more than the minimum amount of the card, you can pay your debt fast, and move on to the next card.

Payoff Your Smallest Debt

Yet another great way to start focusing on paying off your debt is to pay your smallest credit card debt. Remain to pay your minimum repayments on all of your cards. However, it is best to pay more than the minimum amount to slowly and easily pay off small credit card debts. Once you have paid off your small credit card debt, we suggest you move on to the next credit card with the smallest amount of debt, proceed to the next, and so on.

Pay In Cash

For those of you who wish to do away with a credit card for good, we suggest you pay for everything in cash. It is never a great idea to add to your debt while you are trying hard to resolve it. Thus, it may be good to pay in cash or make a habit of paying for your purchases using a debit card.

Never Miss The Most Important Stuff

Whenever you have money, make it a habit to always take care of your most important expenses all the time. This means settling the charges for basic utilities, rent or mortgage, phone and internet bills, insurance, and more. We are totally emphatic with people who find it hard to hold back on the more gratifying expenses but, this is exactly how your credit card debt ballooned in the first place. If you carefully follow through this strategy, it can dramatically lessen the likelihood of you falling short on your finances and avoid depending on your credit card. You can instead, set up a direct debit with regular payments on the most important expenses, so you do not have anything to worry about.

Assess Your Savings

The next thing you have to do is to evaluate your savings. As the last thing you want to do is to make use of those savings and pay off your debts. However, this can be a sound option for some people. When you consider all things, you will find that the interest on your cash that is simply idle in your bank account is far less than the interest of your credit card that kept accumulating. So, it is something worth taking a good look into. At times, it is best to take care of the debts and bills and then start with a brand new slate. The last thing you would want is to end up with a very bad credit history.

Do you need a type of cash loan? If so, apply today with Perfect Payday. We will introduce you to a direct lender who can help you get a loan immediately. Submit your application today by clicking through to the homepage and clicking the apply button.

Start Budgeting

There is nothing safer than this advice – budget, budget, and budget! The best way to get out of the credit card trap is to start budgeting. Make sure to plan for all of your regular expenses like rent, electricity, fuel, and or food in a regular basis. When you plan everything right, there is less room for any unexpected surprises. You will always have a lot of cash for everything else. It is a very great idea to set aside a little cash for any emergencies and unforeseen events. You can use the extra cash for other stuff too like for travel, leisure, or buying something nice to treat yourself. Also, consider budgeting for your fun money. This way, you will not depend on credit. It can help you have a budget so you can see where exactly your finances go.

Close It Down

The moment you have paid off your credit card debt, close it down. Check with the bank and have them close your credit card account entirely. It will be very easy to fall into old habits, so make sure to get rid of the temptation now. The worse part is, if you refrain from shutting down the account you will still incur fees and charges. But, the great news is, credit card companies will provide the option to close it down, you can also do this online.

Avoid Getting Overwhelmed

It is vital that you do not get overwhelmed. It can be very easy to overlook a debt and then feel defeated and be unable to free yourself from it all. But, if you think things clearly – you always have a way and planning is the best way of doing it. If you know exactly how you go about it all, you can start banishing credit cards real fast before you know it. Make a serious commitment to stick to your plan. It is important that you write it somewhere you can see every day to remind you of your goal this year. Remember to always play more than the minimum on higher interest cards, this will help you get out of debt fast. When you finally see your credit card balance going down, you will be proud of yourself. There is no better feeling than getting out of debt this new year!

Are you on Centrelink? If so, when you need a loan you can apply for a Centrelink loan. This type of loan considers your Centrelink payments as income in order to allow you to borrow money.

About the Author

Lucy has over a decade of experience in finance. She is currently the content curator here at Perfect Payday.

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