Ways to Avoid A Circling Debt
If you feel alarmed opening your billing and credit card statements every month, you are not alone!
With loan/debts, biggest challenge is that, it balloons quickly, kudos to the high interest rates!
Take these few steps to keep your debt from incurring mind-blowing interest rates:
> Pay More Than The Minimum Amount Required – Paying more than the minimum will greatly reduce both the time it takes you to pay off that debt and the interest that you’ll pay on it. Even if you can only pay $100 or $50 more each month, do it.
> Stop Spending. – This is self-explanatory, if you want to keep your debt from spiraling, stop adding to it. Move to spending cash until you can reduce your credit card debt. It’s tempting to pull out your plastic to pay for a new item that you fancy. But instead, save up the money first and then make your purchase. Remember, every time you make a purchase, you are making it even more difficult to pay down that debt.
> Make a Plan – You’ll have difficulty to control your debt if you don’t first draft a plan to deal with it. Target the credit card with the lowest amount of debt. Make extra payments each month on that card until it’s paid off. You can then move on to the card with the next highest amount of debt, making extra payments on it. Or, you follow the same strategy but start with the card with the highest interest rate, making extra payments on it each month until its balance hits zero. Then move on to the card with the next highest interest rate.
> Cut Unnecessary Expenses – If your credit card debt is out of control, you need to make paying it down a priority. One way to do this is to free up extra money each month by cutting down on unnecessary expenses. This could mean reducing the number of times you eat out each month and using those extra dollars on your monthly credit card payments. It could mean ending a gym membership. You can exercise without belonging to a gym, after all.
Just make sure that when you reduce an unnecessary monthly expense that you use this money to whittle down your credit card debt.
> Tackle the Reasons Behind Your Credit Card Debt – The final step in controlling your credit card debt might be the most difficult: You need to determine why you ran up so much debt. What were the reasons behind your excessive debt?
If you don’t figure out why you abused your cards, you run the risk of running up your credit card debt again after you pay it off. If you want to keep your credit card debt from ever spiraling out of control again, you need to take a close look at your negative spending habits and change them — permanently.