Remember getting your first credit card? Super excited as you open the envelop and think about all the things you can now get. Looking at the balance on your statement, doesn’t look so great now – right?
What would your life look like if you didn’t have any credit card payments? If you had a pile of money saved up in the bank? If you owned your stuff instead of it owning you?
I’ve got some strategies on how to pay off your credit card debt fast.
Is Debt Consolidation a good idea?
If you have a lot of debt, some people will tell you to consolidate your debt. Debt consolidation is just masking the problem. Debt is not a math problem, it’s a behavior problem. Many people who use debt consolidation end up in more debt than when they first started. Because they just move their debt around and they don’t address the real problem.
Avalanche or Snowball Method
Another way people say you should pay off your debt is to pay the debt with the highest interest rate to the lowest. Avalanche Method
By paying your debt off from the smallest (regardless of interest rate) to the largest, you’re going to have some quick wins. Snowball Method. People get out of debt faster using this method.
Stop using your Credit Card
Sorry to say, but getting out of debt requires taking those credit cards out of your wallet.. Put them away, until you have completely paid off your outstanding balances. Paying for your purchases with cash instead of credit will help you separate your needs from wants. By being conscious about your spending, you’ll think twice before spending money.
Trim expenses to free up some cash
Review your monthly expenses and look for ways to cut your costs. Start by tracking your spending to become aware of where your money is going (do this for one month). It’s time to ditch your favorite coffee stand in an attempt to save money. It’s hard to see how much you spend on purchases like this because you are only paying R22 – R30 every time. You don’t see the big picture or the overall financial costs of these small purchases unless you look at them as a whole. Check your spending to see if you can find more ways to save some money.
Create a Monthly Spending plan
Learn how to pay off your credit card debt fast and to stop borrowing from your credit cards again and again. To do this you will need to create a monthly spending plan for your money. Not only will this ensure you are living within your means but it will also give you a set timeline on when you can expect to get debt free.
When you’re swimming in red-letter bills and harassing phone calls, it can often feel like there’s no way out. But by using the strategies above, you can free yourself from the shackles of debt.