Getting Rid Of That Huge Credit Card Debt

If you start to fall behind on your credit card repayments it can cost you hefty sums of money that would have been better off used to pay down your debt. How the card providers work is that if you don’t make your minimum monthly repayment by the due date, then most providers will charge a late payment fee. Although credit cards are good in the short term, all too often they are used in the long term, even if we weren’t planning on doing this at first. It’s all too easy to keep paying high interest rates to be able to buy items before we actually have the money in our banks. At an average rate of 17% APR, credit cards can burn through your money fast. Switch to a 0% credit card and save yourself a fortune. Whether you are just paying off an extra amount from your debt per month, or whether you are using our How to Pay Off Credit Card Debt system, when you first begin tackling those debts you are likely to have a negative mindset towards your debts – they have caused you a big headache for a long time! What you will experience initially is a small trickle, the trickle of those regular extra payments.  If you only pay your minimum monthly repayment and carry debt forward from one month to the next, you are likely to find you are barely treading water with the debt and that you are getting charged a lot of interest from one month to the next. If you make a bigger repayment and remember it might only be a few dollars here or there, it will all add up in the long run and help to reduce your debt and save you some interest. This may go against the last point, same as company suggested, but sometimes it’s good to pay off the bill with the least on it first, and get it out the way! If you owe 1000 on one card, and a total of 100 on another two cards, paying off the smaller two cards (even if the APR isn’t as high) can give you motivation. Once you see two cards paid off, this can be a great motivator, and make you feel like you are getting somewhere.

The key to turning this trickle into a snowball, and eventually into an avalanche is the mindset you have. Whist you have a negative mindset about your debts – you are worried, you get stressed just thinking about them – it is difficult to even make the trickle happen. If you are anything like me, you would try, and then stop and it all builds up again. It is difficult, if not impossible, to just change your mind set at a click of the fingers, Set up a system where you challenge yourself to get an extra sum of money into the card each week by cutting back you’re spending. You will be surprised how much that amount will add up to at the end of a month and how much quicker your debt will be paid off than if you just paid the minimum payment into the card on a monthly basis. Credit cards usually charge around 17% APR. Where as the average loan amount is around 7%. Moving your debts to a loan can be good in a few different ways.

  1. It can obviously reduce your interest, therefore reducing the amount you pay back in the long run.
  2. It will give you a break from trying to balance all your different cards. Keeping track of a few credit cards, store cards and over drafts can be challenging and stressful.
  3. Also it will give you a set amount to pay off, and you will have a set date you will have paid off the debt, one that you can look forwards to.Credit Card Debt

Beware! Paying off your debts with a loan does not mean you should then start using your credit card again, just because you have “paid” it off. You haven’t paid your debt off just yet. It’s just taken a different form (one that will be easier to pay off) but still one you need to pay off to help you stay out of debt. So, you’ve got over the first huddle and you have started the trickle. Stick with it, and as you see results from this trickle your mindset will start to change. You will feel a sense of achievement; you will start to feel more positive towards your debts and start to feel proud of your progress. It is when this happens that things will start to gather pace in your effort to pay off your debts.   Doing cash advances on your credit can really cost you money. Not only are you getting charged interest from day one, you are often charged a fee for the privilege. Some credit card providers also separate purchases from cash advances and will charge a different interest rate on each and spread your repayment across each. Use other means to get access to cash such as using your transaction accounts rather than your credit card.