Finance-Paying off Credit Card Debt does not have to be hopeless. In fact you can make it fun. Put your mind to it and let’s do it!!!
The first question I think should be; just how much credit card debt do you need to pay off? In anyone’s personal finance- learning how to pay off credit card debt is of utmost importance. If we start from there it will be easier to line up our plan to get it accomplished.
If anyone has told you it will be an easy task; then you need to tell them to read this post. Depending upon how much card debt you have; it will not be so easy unless you have residual income after all monthly bills are paid without cutting down on some of the indulgences, pleasures or unnecessary spending to make it work.
If you are loaded to the brim already and have little residual income after all expenses to include utilities and food, you will need some self discipline. But, let’s start with some possible cuts to make it happen; even if it is a slow process. In Finance -Paying off credit card debt we will try to give you some solutions that have been used. You may alter these to meet your needs but must make sure the end results are the same.
Listed are some ideas that may sound depriving, but if you are struggling; it will be worth the effort to change a few habits until you have accomplished your plan:
A budget is always in order!!! Read this book: The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness by Dave Ramsey
- First take a step back and find out why you have charged so much on your credit cards. You may find out that you did it without thinking of the consequences; just habit.
- If you can find a new credit card with at least 24 months with NO interest; transfer balances to this card. **NOTE: do not charge ANY card to the maximum high balance; this will affect your credit score by as much as 6-10 points depending upon how many cards (revolving chargers) you have.
- Most individuals who have had this issue; normally take the lesser balance credit card, pay it off first and then proceed to the next one. It will work, but it will still take a little time.
- Paying off a credit card debt is no different than paying off your mortgage early. The more you pay to the principal; the less interest you will be charge if have interest on your card. It will dwindle quicker than you think if you are really determined to make it happen.
- If you do not have a problem with residual income left over; then all you have to do is cut out the charging on cards and pay cash, and in turn payoff your credit card debt for good.
- Make a budget and stick to it. Give up doing things that are simply for pleasure until you can afford them again. Monitor yourself, if you are in debt you did not get there overnight; and if you did, something else is not adding up and you will NOT get out overnight.
- Don’t buy movie; watch TV movies. This can be expensive and add up if you are buying movies twice a week. Put it toward getting out of debt.
- Cut down on going out to dinner for awhile. Many people had rather have dinner at home and have more cash available for whatever come up latter while going out occasionally. If you are low on cash; this extra money can go toward the credit card debt. Eating out can get expensive.
- Buy clothing that does not necessarily have to be dry cleaned; when possible. White shirts can be washed at home and ironed. Grandmothers did it all the time.
- Learn more about saving , living with financial security and planning for a happy retirement.
Remember that it is never easy to pay off significant debt. If you are credit conscious, then you will know that paying your obligations in a timely manner is of importance and must not be ignored. You cannot borrow your way out of credit. It will only add to you frustrations.
Alternative Solution: If there is no other way and your credit scores are good; you have stable income, and have equity in your home, then a mortgage refinance may be for you if you own your home. You can consolidate all of your debts into one monthly payment, but most banks and mortgage companies will insist that you cut up your cards. I suggest this only if there is no other way.
Regardless of what you read; when you add debt to your mortgage, you will also add new closing cost for the transaction which can add up to more than 3% some times, and that may take you 5 years to recoup. It will definitely add to the term of the loan. For retirement purposes any individual should be mortgage free in the now economy that we are positioned in within America. Wealth is not what it used to be.
My experience with finance and credit: I worked in mortgage lending for 30+ years. I have approved and denied loans (Mortgage Loan Underwriter) due to credit overload, high debt to income ratios and lower credit scores caused by too much credit; among other issue. I have reviewed financials, income, credit, assets and even the wisest of people sometimes do not take their financial status seriously.
P. S. By the way, there are more solutions than we have in print here. But these are some things to start and when you begin you will get excited and feel free again once your have accomplished your goal.