Being in credit card debt brings a lot of stress and worry into peoples’ lives but once the convenience of using a credit card is established it can be difficult to let go. One of the main reasons that people get into credit card debt is that using a credit card means that you don’t see money physically leaving your hand and this makes it easier to use than cash. For most people if is easier to hand over a piece of plastic rather than hard earned cash but spending on credit cards is harder to track meaning that overspending often occurs. You cannot do this with cash; once it’s gone, it’s gone!
If you have a whole bunch of credit cards that you need to pay off it can be very overwhelming and difficult to see a way out of the debt. We have collected some tips which we hope can help you to motivate yourself to lose the credit card debt.
Firstly, you need to stop getting into further debt and the best way to do this is to quit using your credit cards. This may sound obvious but can often be difficult. If you have no choice but to use a credit card in order to pay for essentials while you work out a finance plan then try to use one with the lowest interest rate. The trick here is to only buy essentials to minimise the debt that you are getting in to. Stop buying luxuries such as take out coffee or pre-packed lunches; make your own at home and see how much you save!
To succeed in getting out of credit card debt you need to write up a budget which takes into account the amount that you need to pay towards your credit cards each month. Then work out everything else that you need to buy, according to priority, around this until your budget runs out. This ensures that you will be able to avoid excessive interest building up each month.
It is advisable to pay more than the minimum amount off of each card as sometimes only paying the minimum will result in barely paying off the interest. Focus on trying to pay off the cards with the highest interest first so that at least you are reducing the overall amount of interest that you are paying. You could pay the minimum on all cards other than the one with the highest interest and pay even more off that one. When that card has been paid off repeat the process with the next highest interest rate and do this until all of the cards are paid off. With each card you eliminate you will have the extra money that you were putting towards that card to allocate between the others, therefore the more cards you pay off the quicker the others will follow.
If may be worth talking to your credit companies about the fact that you are struggling. It is possible that they will lower your interest rate or freeze late payment charges for a while until you catch up with your payments. It is always best to keep them in the loop if you are having difficulties instead of keeping quiet and running up high fees.
The thought of not being able to treat yourself on your credit card may make you feel down so it is important to keep your mind on the end goal and stay motivated. Great ways to motivate yourself include using pictures of things that you would like once you become debt free and talking about your goals and success with friends and family. Not only will they support you but it will make you feel a sense of achievement when you share how far you have come in your quest to get debt free!
When you have your credit card payments under control try to put some money into an emergency savings pot each month. It does not need to be a lot but any money towards unexpected emergencies, such as a car breaking down or having to take time off work due to illness, can really help. The money must be used in emergencies only though; needing a new outfit for a night out is not classed as an emergency in this case (which is unfair I know).
Finally, when both your budgeting and credit card debt are looking better, do not feel tempted to take a step backwards and splash out on a treat. Until that debt is paid off you need to remain strong and stick to the plan. Reward yourself with treats that cost very little, or nothing at all, such as visiting friends or baking yourself a massive chocolate cake!
If your debts are too much for you to handle on your own you can call Valour Financial Management and one of their advisors will be happy to help you to work out the best solution for getting you debt free. You can call them on 0800 007 6888 or visit the website at www.valourfinancialmanagement.com/
By Sasha Davison
6th March 2014
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