According to Make Lemonade, credit card debt is the third biggest consumer debt after mortgages and student loans.
A credit card is a trap that gives a feeling of “free money,” which makes people spend more than they ought to. It becomes worse when they drown from all the debts they couldn’t pay.
When credit card debt remained unpaid, the interest rate could build up. This would make it even more challenging to pay off.
So, if you have credit card debt, here are eight (8) tips and tricks to help you:
1. Consolidate with a Personal Loan
A personal loan is an unsecured loan that has a fixed interest rate. Use your personal loan to consolidate your debt. Personal loans have a lower interest rate compared to the interest rates of credit cards.
You can pay off your debt using your personal loan by paying high-interest debt with a lower-interest personal loan. Combine different types of debt into a single personal loan. You can make your debt payment more organized and manageable. But make sure to get a loan only from a licensed money lender. A legal lender will help you choose a more flexible repayment plan than you can meet with ease.
2. Transfer Balance to a 0% APR Credit Card
If you need a break to pay off your credit card debt, you can transfer your balance to a 0% APR credit card. You can also get back on track with your finances by doing this.
Take note that a 0% APR promo is usually temporary. Some may last for about 12 – 15 months. During that period, no interest rate will be charged on your credit card balance. Your goal during that period is to pay off your balance in full.
Before the end of the 0% APR promo, be sure to set up a transfer as soon as possible. Also, stop spending on your credit card.
3. Use of Personal Loan Calculator
If you are using your personal loan, you can use a personal loan calculator. This way, you can see how much money you can save while paying for your credit card debt. You can only use your personal loan calculator if you are using a personal loan.
Remember that the interest rate on your personal loan is usually lower than your credit card. So, it will be practical to use your personal loan in paying your balances.
A personal loan will only be useful if you can meet the repayment plans. This solution could backfire if you did not have the discipline to pay on time. The loan calculator will help you see if you can pay on time if you get a loan.
4. Use Reward Points
When you are using a credit card, you can earn rewards. But you need to make sure that you pay your bills in full each month. You can even use a cashback on your credit cards. Take note that if your credit cards do not have high-interest rates, then credit card rewards are good earnings.
You can use the points your card earned to pay part of your bills. If you have accumulated a lot of reward points, it can help you a bit with your bills. But if you can’t handle your credit card bills now, it is best not to use your card for a while.
5. Financial Game Plan
Another thing to keep you on track is to get a better budget game plan. The first thing to do is stick to your budget plan and make sure that you don’t spend more than you have.
Collect all your debt, then find out the balance and interest rate on each. Pay off those that have the highest interest rate, like credit card debts. Also, try to cut your costs as much as possible.
Remember that by having a better financial game plan and sticking to it, the sooner you will be out of debt. Keep a tracker, whether a handwritten note or with a mobile app. List your expenses, no matter how small. This list will show you where you are spending your money and which ones to cross out to minimize your spending.
6. Let Go of Annual Fees
Credit card companies captivate their customers by giving enticing offers when you sign-up. Little do you know that these credit cards usually come with an annual fee.
If you are already bogged down with a credit card debt, getting another one with an annual fee would only put you deeper into a pit. And if you have credit cards with a high annual price, it is advisable that you pay them off and then close them down.
7. Stop Using Credit Card
Another thing to reduce your credit card debt is to pay using cash as much as you can. Stop using your credit cards until you see your balance reach zero (0). If you still use your credit card while paying your credit card debt, you are only making your situation worse.
If you can’t control spending with a card, cut them. According to money lender cashmart.com.sg, Multiple credit cards are hard to manage since they have different billing cycles and due dates. It is easy to get confused and forget. Some people also get the illusion that having various credit cards gives them more buying power.
8. Get a Side Hustle
Increase your income. Getting a side hustle is another excellent way to earn extra money that you can use to pay off your debt. There are several freelance jobs on the internet nowadays to try them in your spare time. With your extra money, you can pay the credit card with the lowest balance first.
When you earn more, you can pay more debts faster, and you can still have extra cash for some wants. Just make sure that you don’t overwork yourself. And while you are at it, you can start revising your spending plan and start saving extra cash.
Article Submitted By Community Writer