How To Start Paying Credit Cards Debt?

Posted on Aug 11 2014 - 9:02am by Julian Hook

Credit Card

Having your very own credit card could make shopping one of the best activities in life. Imagine, going to your favorite stores, trying on all the shoes, accessories, bags and other items that you want, swiping your card and it is all yours for the keeping. The payment gateway system has also made it very convenient for those who enjoy online shopping because now people could shop around using their credit card right at the comfort of their own home. If you are one of those individuals that feel on top of the world because spending was never made so easy with a credit card, you might want to jump back into reality and face the truth.

Yes, credit cards are so much easier if you need to purchase anything at all immediately. The only problem that you must soon face are your credit card debts that will be arriving sooner or later. This issue leaves many people facing monstrous credit card balances that they never thought they would have. So all the spending on all the goods the past month or so has turned into a nightmare that you feel like you cannot escape. Unfortunately, there really is no quick-fix way on how to get out of your debt. Here are some effective methods that you could try if you need to start paying off credit card debts immediately.

Focus on paying off the most expensive balance first

One of the best tips to keep in mind is to pay off the debt that is most damaging to your balance. You will realize that this is the balance that has the highest interest rate among all the other balances that you spent. It may sound like a total hassle because big numbers do not intrigue you, but you may come to realize that many of the accounts with high interest rates may use up more than 30% of your entire credit line. Paying that off will improve your credit score since it is important to consider debt utilization. Just remember, the lower utilization, the better for you.

Do not close credit cards with existing balances

Although it may seem like one of the easiest ways to stray away from your debt, it could also do a lot of damage on your credit score. What you might not realize is that even if you close one credit card, it does not mean you will have no debt. All this will do is lead your debt utilization into the gutter, which will decrease your credit score further down.

Move debts around

It is a smart move to do balance transfers or move your debts around. However, you first need to take out a calculator and do some computing. If you did not know, there are certain fees that are related to transfers. You have to make sure that the interest rate that is lower counterbalances the fees. Make sure to have a plan of action because you will be wasting your time if you do not think about the wise transfers.

Figure out what you could get give up to lower your debt

If you are attached to all the items that you brought with your credit card, you may have a big problem with this tip. However, one of the smartest moves that you could do in order to lower your debt is to liquidate what you really do not need. Think about what you do not use too often as of the moment and consider returning it. By doing this, you could prevent from having financial hardships later on in your life.

Start an emergency cash fund

Everybody should have some sort of emergency fund if ever they need it for certain situations that may arise unexpectedly. By having your own emergency fund, you could undo months of unpaid balances, which could really ruin your credit standing. The secret to an emergency fund is to set aside a few bucks every month and store it away somewhere around the house. You could hide it in a box under your bed or closet, keep it in a cookie jar or have an extra wallet where you could leave at home. Remember that these funds are for emergency situations only. It is not for spending just because you want to go out of town with friends or buy a new piece of technology.

Pay off your credit card debts in a smart and timely manner. Figure out a plan of action so that you could reduce debt problems once and for all.

About the Author
Julian Hook