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Credit cards are like two edged swords. The main draw about credit cards is it can be used as a substitute for cash during a transaction.  Items can be purchased with this piece of plastic! It’s used in place of cash that you may not have in your pocket. On the other hand, credit cards can be a powerful tool in your finances.

Being able to pay your entire credit card balance by the due date can be beneficial to the card holder.  You save money because you are not paying the interest rate, you can get points to get merchandise or travel points and you can also get cash back for using the credit card.

Effects of Debt

Being in debt can cause a lot of stress, anxiety and sleepless nights.  Many are in denial thinking that they will eventually catch up and pay their credit card balance. There are a small percentage of individuals that may accomplish that feat and there are many that won’t.  Financially it can be a struggle, yet the credit card is still used almost daily.

When that credit card bill comes in, only an affordable amount or the credit cards minimum is paid because finances may be limited.  What can be done with your credit card debt?

 

 

Analyze your situation

How much debt is owed on your credit card?  A large debt can have an impact on anyone.  Anxiety and worry kicks in and can affect your health in different ways like not getting enough sleep at night because of worrying how you’ll get the money to pay your bill. First of all, we need to realize that WE got ourselves in this financial mess!

When we realize the extent of this mess we have created, take responsibility for putting yourself in this situation.  Never blame anyone else but yourself for the debt that was created.

When we come to a point of realization and taking responsibility of the situation we’ve created for ourselves, we can move forward and create a solution to better our situation.  Credit card debt can be burdensome but there is hope to get out of it.

Get Rid of that Credit Card

First and foremost, you need to get cut up that card that got you into to this mess into bits with a scissors and throw it away.  Doing so will keep you from using it for the time being.  By getting rid of that credit card, you are giving yourself an opportunity to get back on your feet financially.  What you’re going to do now is get behind the driver’s seat and become the responsible driver in control of your credit card instead of your credit card being in control of you.

Being in control of the credit card means that you are being responsible for the use of the credit card and paying it off every month. In the near future, you can always get another credit card with more benefits to you. 

Creating that Plan

The primary plan to get out of credit card debt is to lower your expenses and increase your income. You can start by setting up a basic budget.  Determine your current monthly income. What are your total monthly expenses? Determine where you can cut back on expenses.

Daily expenses such as daily trips to the coffee shop and buying lunch everyday can add up significantly.  If you were to cut back on these expenses, you would be amazed at the amount that these expenses would have added up to in a month.

That unspent money could go towards a savings plan to better your future or the money put aside from those daily coffee and lunch expenses can be used towards paying off the credit card bill.  Again, take a hard look at your income. How much income do you have coming in and how much is needed monthly for your mortgage, utility bills, car payments and purchase of groceries.

When you determine how much income is coming in and what your monthly expenses are, you will then get an idea if you can make larger payments towards your credit card debt with your current income or if you will need to find a side job to get more income.

Set a Goal Date

After determining your current income and expenses, you can set goals to complete this goal of getting out of credit card debt. According to your credit card balance, determine a reasonable time frame to pay off your credit card debt. It can take a few months if you owe a few hundred or a few years if you owe thousands of dollars.

However you look at it, you need to be the responsible individual in control of your finances. You may be so sick and tired of the bondage that credit card debt can cause that you just want to be done with it. We want it paid off as soon as possible but where is the money going to come from?

How will you pay off your credit card debt? 

Getting extra funds to pay off a credit card can create a challenging situation.  I’ve seen credit card interest rates ranging from 15%-24% APR.  Take a look at your current interest percentage rate and the current finance charge you are being bill for. That amount calculated over a period of time can be costly for you financially.

For example, if your average current month finance charge was $125, if you were to multiply that amount say for six months, that amount is $750.  Credit card interest rates can be high and costly for you financially.  Your best bet to counter this cycle of high interest rates is to get a consolidation loan to pay off the high interest credit card balance that you currently have.

Get a Low Interest Loan

You can visit your local banks to inquire about consolidation loans. These loans can be use to pay off your high interest credit card.

Become a member of a local community federal credit union can be helpful for finding reasonable consolidation loans.  Local credit unions in our area at the time of this post are averaging about 4.75%APR!

To help you out from having to pay those high monthly interest charges, look at getting a consolidating loan. Pay off the remaining debt with the payment plan you’ve agreed to.

Side Jobs

When you finally consolidate your debt, you want to help speed the process of paying the entire balance. Consider looking for an additional side income or job.  Look at ways to make extra cash!  Spending a few additional hours a week can be beneficial for accomplishing the ultimate goal to be debt free.

 

Be a responsible credit card user

Paying off a credit card debt is a big accomplishment.  Having a credit card debt can eat away at your health with worry and anxiety.  Once you complete your payments, it’s a lesson learn that there’s a good reason for using credit cards.

There’s also a negative side of using credit cards also.

Because you have allowed yourself in debt, never allow it to discourage you from using credit cards again. Rather, allow the experience to help you renew a view on how to use a credit card correctly.  

Related posts: Saving and Spending Ideas So You Can Make More Money

Shop for a new credit card that have rewards that match your needs.  There are credit cards that have rewards for travel, merchandise and cash back.  Be sure to read the terms and conditions for the credit card you are shopping for.

When using a credit card, you want to be able to pay off an entire balance every month.  Being a responsible credit card user also makes you a responsible individual with your finances.