At the moment, more than 125 million people in the United States have credit card debt. Furthermore, the debt totals over 527 billion dollars. The interest rates are on the rise, so leaving your debt unpaid is only going to become costlier. Luckily for you, whether you in the UK or US, we have a few tips that can help you reduce your debt.
1. Set Long-Term Financial Goals
First things first – you should figure out what’s most important to you and your family. Just as yourself, what are some of your long-term goals in life. Do you want a new car? Are you trying to buy a house? Figuring out your personal goals and reminding yourself of them will keep you motivated to reach them in the near future.
2. Stop Spending So Much
With so many small business credit card processing options out there, shopping online is easier than ever. It’s no wonder why so many people get carried away with spending. You need to see what luxuries you can leave without and eliminate them altogether. Delay some big yearly expenses, like holiday spending and vacations for a year or two.
3. Try to Reduce the Interest Rate
Take a minute to think about all of your credit cards – their minimum payments and interest rates. Call your company and see if they are prepared to waive some late payments or even ease your interest rates. While some companies will not comply with your demands, it definitely never hurts to ask.
4. Write Down Your Spending Budget
As we discussed above, most people are not aware of how much money they spend every month. Figuring out a monthly budget will help you stay debt-free. Therefore, you should allocate some of your money to an emergency budget that will be there in case of an emergency. If you lose your job, for example, you’ll be able to turn to your emergency fund and not worry about paying the bills.
5. Eliminate the Most Expensive Card
Paying the minimum on time every month on each card you own will help you avoid additional fees. And you should try to pay off the most expensive credit card first. And once you manage to pay the most expensive card off, you should take the amount of money you were paying and apply it to the credit card with the 2nd-highest interest. Simply repeat this process until all of your cards are completely paid off.
Final Thoughts: Have Some Fun Too
By following the tips we gave you above, you should be able to pay off your debts in a couple of months. This should be an important milestone in your life, so why not have some fun?
Go out there and celebrate. Try to create a lasting memory that you can turn to every time you get tempted to overspend in the future.
And remember: being debt free doesn’t just have benefits on a financial level, but on an emotional and personal level, as well.