Paying Down Your Debt

If you feel like you are becoming overwhelmed by your credit card debt, you are not alone. In fact, the average American family is carrying about $8,100 in debt. And, if they only pay the minimum payment every month, it will take each of these families about 30 years to pay off the debt.

Obviously, you don’t want to wait 30 years to call yourself credit card debt free. So, if you are one of the many people carrying a balance on your credit card it might be time to start considering a few strategies for paying that debt down.

Pay on Time and Don’t Exceed Your Limit

The first thing you need to do is make sure you make your payments on time and you never exceed your limit. This only adds unnecessary fees to your already bloated debt. In fact, approximately 31% of the profits made by credit card companies in 2005 was from these fees. Don’t pay more money than you have to.

Stop Spending (this one is critical…)

If you hope to eliminate that credit card debt, you need to quit adding to it by making more purchases with your card. If you do not have the cash to pay for the things you want, wait until you have saved it up and then make the purchase rather than charging and worrying about paying it later.

Send Extra Cash

If you take a closer look at your budget, you may discover that you have extra money each month that isn’t already going toward bills. Send that extra money toward your credit card.  If you have more than one credit card with debt on it, choose the card with the highest interest rate. Pay the minimum on the other cards and pay extra on the one with the highest rate. After that one is paid off, turn your attention to the card with the next highest interest rate until your debts have been eliminated.

Set a Goal and Stick to It

After looking over your total debt and income, you should be able to set a goal for when you will get the debt paid off. Set a reasonable goal and stick to the plan for reaching it. Remind yourself every day of your goal and of how great it will be when you finally get the burden of debt off your back.

One comment

  1. It's also very important to choose the right card for transferring your balance. If you look closely through balance transfer credit cards, you will see that some of them have low intro or ongoing APR, some of them have no fees or whatever. You should decide how you will use the card, how you will be able to pay off the balance and this will determine the set of features your ideal balance transfer credit card should have. For example, if you're going to pay off the debt very soon, look for the card with lwo or no fee; if you will be paying off the balance for a number of months, low APR should be of your interest.

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