It sucks, doesn’t it? Having to wake up every morning wondering whether today is the day you have to sell your car, home, or other precious belongings in order to pay off a credit card debt. Yes, overdue debts can be stressful, emotionally overwhelming, and bad for your credit score. The truth is that no one loves being in debt, but millions of Americans still find themselves in it anyway. What goes wrong?
How Does Credit Card Debt Build Up So Fast?
Well, we can all agree that credit cards can beas addictive as heroin (most addictive substance on the planet). That’s because, with credit cards, financial worries become a thing of the past – but only temporarily. All you have have to do is swipe the card and that dress, suit, TV set, car, or jewelryyou’ve been eyeing for long becomes yours.
During such times, as we swipe the card here and there, we always say: “this is the last lavish item I’m buying” or “I’ll make enough money to pay the credit card company back” or, even funnier, “if I don’t buy this/enjoy life today, when will I get the chance to do it again? – YOLO, right?
Basically, it very easy to get sucked into the world of lavish spending; forgetting that with each card swipe, we fall deeper and deeper into debt. So, what happens when it’s time to pay up?
Are You Struggling To Pay Off a Bad Credit Card Debt?
If you are one of those unfortunate to have fallen prey to this predicament, don’t fret; there’s always a way out, but it’s never easy. Just like drug abuse rehabilitation, getting out of debt can be physically and emotionally grueling. And it takes a lot of commitment, discipline, and planning in order to get clear of it.
The time it takes to pay off your debt is often highly dependent on how you go about it. For example, if make the minimum payment each period, then you are going to take longer and spend more to clear your debt. On the other hand, if you paid larger installments each time, you’d take a shorter time to repay the debt and also the interest rate would be lower. It’s that straightforward.
But before we get into what you should do, here are a few things you should NOT do when trying to repay a bad credit card debt.
The 5 Commandments of Repaying Financial Debts
1. Do not keep to your spending habits – they are the reason why you are where you are right now.
2. Do not buy what you want – there’s a difference between WANTS and NEEDS. Stick to what you need – at least until you clear your debts.
3. Do not apply for another credit card– …even if your credit score is still intact. You cannot fix a broken leg by jumping off the same tree again. Get it?
4. Don’t stop saving (or start if you haven’t begun) – Financial emergencies are sometimes the reasons why people get into debt. Having an emergency fund in place ensures that you don’t have to get more loans (debts) when you need cash urgently.
5. Do not ignore your debt repayment obligation – Failure to pay credit card debts often sets off a chain reaction that always ends in a courtroom. This means looking for cash to hire your legal representative which may toss you deeper into your financial problems.
With that in mind, the next thing you need to consider is how you are going to get out of your debt problem. As mentioned above, your approach will greatly affect the cost and time needed to pay off your debt. Below are a few practices that can help you to quickly and easily clear what you owe your credit card issuers.
Useful Bad Credit Card Debt Repayment Tips
* Evaluate Your Financial Status
The first step is to determine where you are – financially. This means finding out how much money is coming in (income), how much money is going out (expenditures), and how much debt you owe. Once you have these figures the next tips will be easy to execute.
* Tighten Your Budget
Obviously, if you want to pay off your credit card debts fast, you will need to free up cash. And slimming your monthly budget is always the best place to start. Try to strip your budget down to bare essentials; items that you cannot live without – like food, shelter, utilities and so on.
* Increase Your Income
Getting extra income is also a great way to ease your financial burden. It will also help you to quickly and comfortably make repayments to your credit card debts. You can get extra income by asking for a raise, finding a second job, opening up a business, freelancing, and so on.
* Prioritize Your Debt
It is a fact that priorities can greatly affect your debt repayment process. If you fail to prioritize your debts then you’ll probably end up procrastinating or failing to commit to your repayment obligations. Therefore, make it a priority; live it, dream it, speak it until you are finally debt-free.
* Get Assistance (If Need Be)
Sometimes, debts can be overwhelming. Too many credit card debts – with different interest rates – can make it pretty hard for you to plan and prioritize your repayments. Trying to repay all your debts at the same time is not practical or wise. Most financial experts advise people to tackle one debt at a time. But there are many other ways to go around this dilemma including Debt Consolidation USA.
Debt Consolidation involves merging all your debts into one debt. This not only reduces the burden and inconveniences of repaying multiple debts at once but also ensures you get to pay at a better and specific interest rate. There are so many reasons why you should consider Debt Consolidation. If you combine it with the tips mentioned above and a little bit of discipline, you may be well on your way to becoming a happy and debt-free citizen.