Credit cards are great for a number of reasons. You can manage your expenses better, maintain a healthy cash flow, and even earn rewards on your purchases when they are made using credit cards. You also benefit from loyalty programs and special offers available to credit card holder, which means you can actually save more money in the long run.
That said, a lot of people suffer from bad credit card debts due to misuse and mismanagement. When you have too many credit cards to pay, repaying them on time can be a problem. This usually leads to late charges and bigger interest. Before long, you have serious credit card debt issues that aren’t as easy to solve.
If these problems sound familiar, you are not alone. Thousands of people in the country suffer from bad credit card debts and the issues that come with them. What you need to do is taking steps to pay off your credit cards.
1. Understand the Situation
There are two things you need to do before you can start solving your credit card problems. First, you have to acknowledge that you have a problem to solve. There is no point in denying the issue; in fact, you will only make the problem worse without tackling it head on and doing it quickly.
Next, you need to understand the situation. This means making a list of all credit card bills you have to pay, the interest they charge, fees and other costs associated with every credit card you have, and the total amount you need to pay to get the credit card debts settled.
These two steps are crucial if you want to pay off your credit card debts. At this point, you know exactly the kind of problems you deal with. Finding ways to solve those issues becomes easier when you know the problems inside out.
With a list of your credit card debts in hand, it is time to work on prioritizing those debts. There are several ways to do this, but the best way to go is paying off the smallest ones first and then continuing with the bigger ones.
By paying off the smaller credit card bills, you are essentially freeing up money to allocate later. Once the smaller ones are paid off, you can reallocate the money towards bigger debts. You are basically building momentum that leads to all of your credit card debts settled.
Once you know which ones to pay first, get in touch with the credit card companies and start negotiating better deals. Acknowledge that you are trying to solve your credit card issues and that you need help getting a more realistic repayment plan.
Juggling multiple credit card bills isn’t always easy and negotiating a more reasonable settlement plan is not always possible either. If this is the situation you face, there are other options to consider. One of them is consolidating your credit card debts using a personal or consolidation loan.
Rather than dealing with multiple – and expensive – debts, you can convert all of your credit card debts into a single loan with lower interest. Consolidating your credit card debts also means repaying them all at once, which means you have more leverage to negotiate a suitable deal.
Once the credit card debts are repaid and consolidated, close them immediately. Don’t even think about keeping the credit cards for later use. You can keep one credit card that gives you the most rewards and added benefits, but the rest must be closed immediately.
4. Work on Your Expenses
You may need to raise more money to regain control over your cash flow. There are two ways you can do this: find new sources of income and trim your expenses. The latter is obviously easier; after all, you are already in control over your expenses.
Start with the least important expenses. This includes the cup of coffee you buy on your way to work and the magazine subscription you don’t necessarily need. Cable TV, dining out, and other non-essential expenses must go too.
Continue trimming your expenses and you will have more money to allocate towards repaying your credit card debts. The more you do it, the sooner you can settle your debts and regain control over your personal finance.
5. Stick to the Plan
Lastly, make sure you stay true to your repayment plan no matter what. With a bit of consistency, you can get out of a seemingly bad credit card debt problem in as little as 12 months. You just have to be willing to make some sacrifices along the way.
Don’t worry; you can return to enjoying a nice cup of coffee every morning and subscribing to both Netflix and Amazon Prime once the credit cards are repaid. You can also choose to continue saving and start investing towards a better financial future. The choice is yours.