Eliminate Your Credit card debt
What is your first step to get rid of your credit card debt
Once you have decided that you need to do something and get rid of your credit card debt, your want to know how to do it. This article provides and answer, but make sure you contact a professional or enlist help from Citizens Advice. The best place to start is to write down on a piece of paper everything you own and owe. In other words one column lists all your posessions and the other all your debts and loans. But be brutally honest with yourself. Now you know where you stand. If you owe more than you own, you’re in the red.
There are two general approaches for getting rid of debt.
- control and reduce spending
- consolidate your debt
Let’s check out reducing your spending first. It is understandable that you get to where you are gradually but ultimately you can either reduce your spending or increase your income to eliminate your credit card debt.
Control and reduce spending
Control yourself and your urge to spend money. Write all your expenditures down. It is a bit of a chore but making it visible is the first step to recognise the problem and also make it easier to see good candidates for elimination. Then go on to eliminate all excessive and luxury spending. Then have a good look at all other non-essential spending. Eliminate as much as you can.
- Be aware of all advertising and offers. Avoid them if yo can, and if you can’t look at it with the eye of the seller. What do they want me to do. How are they trying to attract, lure and tease me into buying. This makes you more aware and better able to resist the buying hunger.
- Only buy things that are absolutely necessary. Never leave home for shopping without a well thought through shopping list and do not deviate from it.
- Do not take your credit card with you. Get a set amount of cash from a cash point and use that for the whole week. This helps you succumb to these sale offers. Did you notice that there are sales on all year round now?
- From the list of all expenses you have made earlier you can prepare a monthly budget. Write down all the essential expenses for the month. Keep track of all expenses on your monthly budget. Now it’s all visible. If you have an urge to spend on this superb offer that is only valid today! you will realise that you then have to write it down on your budget and it will not look so good. That alone can help you resisting the offer.
- Do not change your budget whatever happens, but reward yourself when you make it. The reward should be in line with your plan. Try and do something nice that doesn’t cost any money or very little.
Consolidate your debt
To consolidate you debt you can move your credit card from a high interest card to a low APR card. You can find cards that have an interest free balance transfer period that you can use.
- Make sure you evaluate all the offers on the market from various reliable sources, like the Which? magazine. Select the card that best fits your situation. This is the most important step in your debt elimination plan.
- Check all the terms and conditions of the balance offers. There might be some special requirement for your situation.
- Also be aware that some cards offer other benefits such as reward point or cash rebates. Include that as well in your evaluation.
The whole process of credit card debt elimination is about carefull planning and above all self-displipline. Make the plan and stick to it.
This information does not constitute financial advice, always do your own research on top to ensure it’s right for your specific circumstances and remember to contact professional help.