Whenever your credit card bill is due, you look at your balance and your stomach drops. The number is so high. You wonder how you’ll ever pay it down, or if you’re going to slip up and max it out when you’re shopping.
It’s possible to get rid of your credit card debt. These are three habits that will help you make it happen.
1. Be Strategic with Your Credit Use
Using your credit card for every type of expense is not a good idea. Credit is fine for online shopping purchases and monthly bills, but you shouldn’t put all of your everyday expenses on the card. These little payments will add up quickly over the month, making your final balance harder to pay off by the time your bill is due and forcing it to collect interest as time goes on. Stick with cash or your debit card whenever you can.
If you need help breaking bad credit habits, you should consider going to a licensed insolvency firm like David Sklar & Associates and signing up for credit counselling sessions. Credit counselling can cover a wide variety of topics, including responsible credit card use to long-term debt assistance. You can carry what you’ve learned in these sessions with you for the rest of your life.
2. Following a Budget
When you’re struggling with credit card debt, one of the best habits to pick up is budgeting. Creating and then following a comprehensive monthly budget will help you track your spending, spot your money problems and cut costs. With enough cost trimming and pruning, you will have plenty of savings to spare every single month. Use the extra money for a good cause, adding it directly to your credit card’s account.
There are no budget styles that suit everyone. Here are some budget systems that might work for you:
- The 50/30/20 budget divides your income into three important categories: wants, needs and savings.
- The envelope system encourages users to track their spending with paper bills instead of digital dollars.
- The modern envelope system follows the same type of organizational strategy as a traditional envelope budget, but it divvies digital funds into a variety of bank accounts instead of placing paper money into envelopes.
3. Paying More Than the Minimum
One of the biggest credit card mistakes that you can make is only paying the minimum whenever your bill is due, especially when you have a substantial outstanding balance. Taking $20-$25 off of the pile every month won’t do much to get rid of your debt. If anything, it will only prolong your repayment. You’ll spend years trying to whittle down the balance as it grows with interest and new transactions.
A savvier credit habit that you should try is to pay more than the minimum every time your bill is due. If you can’t handle repaying a huge chunk at once, consider repaying in small amounts several times a month.
These habits will do more than get you out of serious credit card debt. They will keep you out of it. You can move past this problem and never look back.
Whenever your credit card bill is due, you look at your balance and your stomach drops. The number is so high. You wonder how you’ll ever pay it down, or if you’re going to slip up and max it out when you’re shopping.
It’s possible to get rid of your credit card debt. These are three habits that will help you make it happen.
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