I find it amazing the amount of damage a small tiny piece of plastic can do in our society today. This small thing called ‘plastic money’ has torn families apart, caused unknown levels of stress and more. I am talking about the almighty credit card. The easy way to get something without working for it.
And now that the ‘things’ we bought don’t have the same value anymore we still find ourselves in an array of debt looking for effective methods in eliminating credit card debt.The purpose of this article is to identify a few methods like analyzing the purchases, paying more than the minimum payments, negotiating a lower interest rate while increasing your income. Let’s explore further…
Analyze the purchases
Have you ever found yourself asking, “Where did all my money go?” If so then that may be proof your aren’t tracking your spending. This is even worse if you are using a credit card because by their design the companies that issue them look to hold you in financial bondage for years. While you should never pay just the minimum you should also ask yourself if the purchases made with the credit card were really necessary and could they have been made with cash. To help you you track things further you should look into using software like Quicken, or Microsoft Money.
Pay more than the minimum payments
If you make just the minimum payments on your credit card it could take 8-17 years just to pay it off. This isn’t a joke. All of the money you send in for payments can be used for other purposes. Now understand that all hope isn’t loss. You still have some leverage because credit card companies want you to stay with them. By using the power of compounding you can pay the card balance off early. And to make it even better you can ask for a lower interest rate.
Negotiate a lower interest rate
Most times negotiating a lower rate will work because they don’t want to lose the opportunity to collect interest from you. High interest credit is nothing to play with and takes years to pay off. Dealing with this while trying to pay other household bills can be depressing. If the credit card company won’t play ball then you may want to consider credit card consolidation. Consolidating isn’t the best option, but it beats filing for bankruptcy. Even with these three previous methods you can get ahead, but the real opportunity happens when you learn how to make money work for you and take the necessary steps to increase your income.
Increase Your Income
Here’s where a lot of people get it wrong. They try and pay everything, but don’t have enough to make the ends meet. You want relief and the only way to do that is to think in terms of less output and more input. Increasing your income WHILE maintaining the same level of spending will speed the process up of getting out of debt. So it doesn’t just make sense to pay the debt, but also learn how to increase your cashflow.
Finally, whether it’s loans from a credit card company, auto, or more you never want to have the monkey of debt on your back. It robs you of freedom and causes too much stress. Make a plan for eliminating credit card debt in your life and stick to it. It might be hard up front, but the rewards will far outweigh any sacrifices.
