Are you struggling to pay off credit card debt?
If so, you’re not alone. Americans carry credit card balances that total over 420 billion dollars as of late 2018. That’s a lot of debt that can prevent you from buying a house, saving for retirement or sending your kids to college.
Paying down debt isn’t easy, but there are some steps you can take to make it a little less stressful. Keep reading to learn how to pay off credit card debt.
How to Pay Off Credit Card Debt
Do you know how to pay off credit card debt? Many Americans don’t, and they’re stuck in a vicious cycle of living paycheck-to-paycheck.
You can achieve financial freedom. Here are seven things you can do to help reduce credit card debt and start saving some money:
1. Create an Action Plan
The first thing you need to do is create a detailed action plan. Write down how much debt you have (be honest with yourself) and what your interest rates are. Then, create a savings plan and a strict monthly budget for yourself.
2. Transfer Your Balance
Interest rates can kill you and make it nearly impossible to pay off your debt. One solution is to transfer the balance to a lower-interest credit card. If you need to improve your credit score before applying for a different card, check out these credit score hacks.
3. Cut Some Expenses
Everyone has some expenses that they could cut. Whether it’s eating out or your Netflix subscription, go through a detailed report of your monthly expenses and cut out a few things. Then you should put this money towards paying off debt. These cuts don’t have to be permanent, and you can reward yourself after you pay off your credit cards.
4. Prioritize Your Cards
Some people have debt on multiple credit cards. In this case, you should always pay off the highest-interest credit card first. But don’t neglect the other cards in the meantime, and keep paying at least the minimum payment on these cards.
5. Get Rid of the Plastic
You can’t pay off debt if you keep using your credit cards consistently. Try getting rid of your cards and paying for everything in cash. Studies have shown that paying cash helps people save up to 20 percent more.
6. Track Your Progress Carefully
Create a detailed spreadsheet that shows when you make each payment, how much you pay and how much you have left. Then you can visualize how long it will take you to pay down your debt. It’ll also keep you motivated because you can see yourself making progress in real time.
7. Get Support From Friends and Family
Admitting you have debt can be embarrassing, but getting support from friends and family can help out a lot. Tell them that you’re trying to cut back costs so they can help you succeed. If you make your goals known to others, you’ll be more likely to stick to them.
Learn More About Saving Money
Now that you know how to pay off credit card debt, you can learn more about what to do with all the money you’ll be saving in the future.
Check out the rest of our site for more helpful personal finance tips and tricks. This article on finding freelance jobs is a great place to get started. Finding some extra work can help you bring in more money to make a financially stable future.