Getting out and Staying out of Credit Card Debt
It’s easy to get into a cycle of paying off debt and then getting back into it. It takes work to stay out of debt. Follow these tips to break the cycle and start building your finances instead of throwing your hard-earned money away on interest payments and credit card debt.
Getting out of Credit Card Debt
- Pay more than the minimum payments – Although credit cards will give you a minimum monthly payment that has to be paid. If you have an abundance of credit card debt, try paying more than the minimum. In an ideal world, your bill would be paid in full every month to avoid interest fees. But if that is not possible, just pay what you can.
- Avoid adding more debt – If you have credit card debt that you’re working on paying off. Avoid using the card until the previous debt is paid off.
- Track your spending – Making sure you are not spending too much money when in debt is an important step in removing the debt from your life. If you find wasted money in some aspects of your life, putting that money towards your debt will help in paying it off faster.
Staying out of Debt
- Pay your bill on time – Not paying your credit card bill on time can do a lot to mess with your credit score. Most credit card companies will also charge you a late fee. Avoiding all of this will help you stay out of debt.
- Treat your card like you would cash – If you are prone to getting into debt, try treating your card like cash. Only use your credit card on things that you know you have the means to afford. This will get you in the habit of thinking before swiping your card.
- Think before opening another credit line – Many people think opening a new credit line is a good idea when trying to build their credit. This can be a dangerous thing to do, especially if you’re prone to falling victim to overspending. Before opening a new card, think about how this can affect your financial future.
- Avoid large impulse purchases – Adding large purchases to your credit card will build your debt tremendously. If you need to make a large purchase. Use the money that you already have, rather than going into more debt.
- Build an emergency fund to discourage having to use your credit card in an emergency – Aim to have a savings account with at least 3 months of living expenses saved up. Once done, you will have financial freedom in case something was to happen.
Getting out and staying out debt is a constant cycle that is hard to break out of. Once you do, enjoy having financial freedom and work on building your financial future.