The reality is that uncontrolled debt is a nightmare for many families. A particular problem arises with credit cards, outstanding balances which have increased.
If this is your situation whether you’ve gotten used to pay the bare minimum each month on your credit card while your total debt rises, as if you need to control your expenses from other sources of credit, the next tips will help you control the situation.
Managing your Credit Debt
1. Recognize and Address the Problem
The first step in solving any problem is recognizing it. Debt is a problem that generates a lot of anguish and shame. It’s like a secret which no one speaks, but if you do not recognize the problem yourself, you cannot take steps to overcome it.
2. List and Sort Our Debts
We have to gather recent statements of all our credit cards and add the balances to see how much our total debt. Thus, we have calculated the size of it and have a complete picture of the situation in which we are involved.
Now it’s making a list of what we need in our credit cards, with for example the following categories: Card Name, Total Balance (debt), Interest Rate, Minimum Payment and Payment Date.
Then you sort them regarding their interest rate, from highest to lowest. That is, first put the card that charges the highest interest rate, and so on. Through this approach, we will focus our efforts on paying the most expensive debts first.
3. Use Only One Card and Leave the Others at Home
Our main objective is to solve our debt. Therefore, we must avoid at all costs continue using our cards and thus increase it. Put only one card in your wallet – which have interest rates and most favorable terms of payment and let the rest at home.
4. Use your Debit Card
If you have the habit of using a card when you need money, get used to using the debit. Avoid accumulating debt on the credit card, you will not receive monthly bills and the money will come directly from your checking account, so you probably think twice before buying something.
5. Pay on Time
If you pay your monthly instalment fee, the credit card company will charge an additional and / or interest. This can become even more complicated if you have multiple cards and multiple payment dates. The solution is to organize notes payday of each card and write it in a place where you see it. Personally I prefer to make payment online, but the truth if your bank charges a fee for the transaction.