Do you lie awake at night wondering how you’re going to make the minimum payments on your credit cards? Financial difficulties are one of the greatest causes of stress. Medical bills are often a huge component of mounting credit card debt. Follow these recommendations from the financial planning experts to pull yourself out of credit card debt and eliminate the stress that goes along with it.
For any goal to succeed there must be a plan with steps that can realistically be executed. The first step is to list all of your debts, balances, minimum payments and interest rates on either a spreadsheet or simply list on a legal pad. Order the debts from those with the smallest balance ending with credit cards having the largest balance. There are two schools of thought on the most prudent way to pay down credit card debt. One theory suggests paying down the debts with the highest interest rates. It is recommended here to pay down the credit cards with the lowest balances first. Making incremental progress towards your end goal serves as motivation to continue.
In order for your plan to succeed, you must commit to not making any additional charges on your credit cards. Do not cancel your cards; this can have a negative impact on your credit score. When making purchases, take advantage of sales & deals offered by Groupon coupons and shops the sales at Nordstrom Rack for great values. Next, determine the amount of your discretionary spending each month. Your discretionary spending amount is the funds remaining each month after all bills, including minimum credit card payments, are made. It is from this discretionary spending amount that increased credit card payments will be made.
Another option for paying down credit card balances is to secure a part time job. Earmark all of the earnings from the job towards reduction of debt. Keep your eye on the end game, celebrate your new frugality and in short order you will have succeeded on paying off your credit card debt!