How To Pay Off Credit Cards Quickly
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OK so you’ve managed to rack up some credit card debt and perhaps you’ve even max’d out 1 or even more cards.
Now those interest payments are mounting and so is your stress and anxiety. Don’t panic! Just take a deep breath and relax. Many of us have been where you are now. Everything is going to be OK.
There is a proven path out of credit card debt and the fact that you are here right now reading this article says to me that you’ve taken the first step.
Look Your Credit Card Debt Square In The Eyes
The most common response when people start to rack up credit card debt is to just ignore it and pretend it’s not there. This is the absolute worst course of action as it will almost certainly lead to even larger credit card debt. An attitude of, “Oh well I’m already in debt, what’s a few more hundred dollars?” can set in and as one additional purchase (that you cannot afford) leads to another, you begin to descend rapidly down that slippery slope into the credit card debt abyss.
The best thing that you can do right now is to take a long, sobering look at exactly how much money you owe. This is the first step to paying off your credit cards quickly. Look your credit card debt straight in the eyes and define exactly how much you owe. Write that number down and let it sink in. Make it real because it is and it isn’t going to go away by itself.
Take Full Responsibility For Your Current Situation
Next, you need to think about ‘how’ you got into this situation. What actions led you into this credit card debt? What measures could you take to void this situation in the future? Whatever decisions got you into this mess, you need to take 100% responsibility for where you are right now before you can change course and move onward and upward out of debt.
Develop A Real Plan Of Action
Now that you know where you are in terms of how much you owe and how you got there, the next thing to do is to plan a course of action that will ultimately lead to a clean bill of credit card health and freedom from debt.
– Stop Using Your Credit Cards Immediately!
Repeat this mantra, “If I can’t afford to pay for it in cash, I can’t afford it!” This means that you stop using your credit cards immediately and only use cash to pay for your living expenses.
- Reduce Your Expenses
The next thing to do is to take a look at your expenses and see where you can ‘trim the fat’. This includes eating out or ordering in, movies, Starbucks etc. Basically any non-essential items need to be retired from your lifestyle (for now anyway). The goal is to increase the amount of cash you have to pay down your credit cards.
- Increase Your Income
a) Sell Unused Items
Once you’ve reduced your expenses, the next thing to do is to increase your income. The best place to start is to look at items around your home that you hardly ever use e.g. toys, sporting equipment, baby clothes, power tools. By selling these items you can free up some extra cash to put towards paying down your credit card balances.
b) Ask For A Raise
The next step to increase your income is in your workplace. If you are employed, think about how you could increase the value that you provide to your employer’s business and then ask for a raise. If you already believe that you deserve a raise write down clearly why and then arrange to meet with your boss to discuss this.
If you don’t ask you don’t get.
If you are self employed, perhaps it’s time to increase your prices? If you struggle with the idea of this, think about how you can provide more value to your customers to justify the price increase.
c) Start A Part Time Business From Home
The Internet has now made it possible for anyone to build a business selling information or physical products online in the comfort of their own home. The best place to start is Affiliate Marketing because you don’t need your own product or even a website to get started.
In fact, the easiest, no cost way to do this is by writing articles.
Check out http://BumMarketingMethod.com for a free step-by-step system for making your first money online, without spending a dime. It really works.
Should You Get A Debt Consolidation Loan?
In my opinion NO. Any consolidation loan worth getting will most likely require you to put up your home as collateral. Why would you want to take on this risk? I certainly wouldn’t, especially in the current economic environment.
In regards to using unsecured personal loans to consolidate your credit card debt, well these will have an interest rate on par with your credit cards so there’s really no point in using them.
Also, a debt consolidation loan requires no behavior changes on your part, and many people who take out debt consolidation loans (without the requirement of closing existing credit card accounts), find themselves in even greater debt than they were initially in within a relatively short time frame.
How To Pay Off Your Credit Cards Quickly & Systematically
In my experience, there is one ‘best’ way to pay off credit cards quickly. Here it is step by step.
Step 1)
Organize your credit cards from the highest interest rate down to the lowest, regardless of balance.
Step 2)
Then make the minimum payment on all credit card debts, except for the one with the highest interest rate. On the highest-rate debt, you pay more than the minimum due. In fact, I recommend that you put as much money towards the highest interest debt as you can while still being able to pay for your living expenses for the month.
Step 3)
Once you pay off the credit card with the highest interest, you then tack on the payment you were making towards that debt to the card with the next highest interest rate debt.
This process continues to snowball with the third most highest, then the fourth, and so on until all credit cards are paid in full.
The advantage of doing this is that you will pay less in interest over the life of all your debts, as your highest interest debts are outstanding/increasing for the least possible amount of time.
The disadvantage is that the card with the highest interest rate may well be the one with the largest balance and it may be more tempting to pay off smaller balances so that you ‘feel’ you are making more progress.
Regardless, if you follow this system and live beneath your means, while always striving to increase your means, you will not only free yourself from credit card debt but you will start to accumulate savings with which you can invest and start to actually build wealth.
The sooner you get started, the sooner your situation will begin to change and the sooner your anxiety and stress will fall away.
About The AuthorChris Benson is quite literally an expert in ‘practical’ and ‘effective’ credit repair strategies designed to reduce debt boost any credit score. For more information on how you can reduce your debt and improve your credit score quickly, please visit 37DaysToCleanCredit.com. |
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