Eliminating credit card debt is a dream come true for a lot of Americans. When you think about it, this is a tricky situation to be in and it does not always mean you have a bad spending habit. It could have been brought about by the tough times experienced with unemployment and the shaky economy a couple of years back.
We all know that unless debtors are able to pay a big amount, it will take years to finish off credit card debt. Not only that, if you total that amount that you spent using your card versus the amount that you paid on your bill, you will find that the interest you paid for reached thousands of dollars!
How to Eliminate Credit Card Debt
If you are deep in credit card debt, there is no way to handle that but to face it. The decision to do something apart from paying only the minimum required amount is a monumental step already. But the question remains, what do you do next?
Here are some helpful tips on how you can eliminate your credit card debts.
Categorize your debts. This simply means you sort all your debts and see which among them have the highest interest rate. Apart from the interest rate, note the balance left for that debt, your minimum payment requirement, and payment period.
Identify your sources of income. By recognizing the different sources of your income, you are able to identify just how much you are earning and the stability of each source. If one source is unstable, best not to put too much dependence on that. For instance, sale commissions vary month on month so be careful when including this in your average monthly income.
List the expenses for your basic necessities. List the expenses that you cannot live without. This means food, utility bills, rent, transportation costs, etc. Do not include credit card payments here.
Compute for your dedicated funds. A dedicated fund refers to the amount that you can afford to pay for your debts. This is computed by subtracting your expenses from the income. If the difference is negative, you are in trouble. You need to look at your expenses to see where you can save more. If it is a positive amount, you can divide that to pay off your other debts.
Determine your payment priorities. First and foremost, your dedicated fund should exceed the total minimum payments that you need to pay for. If not, you need to go back to your expenses list and see where you can save to increase your funds. After that, see which of the payments need your priority. This could be high interest rate credit cards or those that are nearly paid for.
Hire a Debt Relief Expert. At this point in time, you should hire the help of a debt relief expert. They will assist you in identifying your best options in paying off your debts. You will both study your financial status and capabilities to see how much you can afford to pay.
Come up with a budget plan. As the debt relief expert works to help you pay off your debt, you need to come up with a budget plan to ensure that you will not repeat the same mistake. Keep of the extravagant lifestyle while you have debts to pay for. It helps to keep your credit cards in the meantime. The temptation to use them grows bigger as you pay off your cards one by one. Do not give yourself the chance to fall back and discipline yourself to stick to your budget plan.
To successfully get rid of debt, you need to go to the root cause of your problems – your spending. You need to spend within what your income can afford. Also, put aside a small amount for emergencies. Otherwise, you may be forced to take out a loan once more.
The key to eliminating debt is by knowing. Get in touch with our debt relief experts and we will be glad to sit down with you to assess your situation. NationalDebtRelief.com is here to help you with your financial troubles. Call use, chat with us or fill out the short form on this page. We will have a debt relief expert contact you as soon as possible.