Do you think you can get rid of your credit card balance this year? Well, being optimistic is a good way to start. It will give you the motivation that you need to accomplish your goal. And when it comes to credit cards, it seems like a huge task to complete.
According to reports, the average credit card debt by the end of Q2 of 2019 reached $6,194 per user. That is a huge amount of debt to pay off. If you do not pay it off aggressively, you might find yourself in debt for a very long time. Credit card debts have a high-interest rate. The longer it takes for you to pay it off, the more it will cost you in terms of interest. If you want to save money on the debt, you need to completely pay it back as fast as you can.
Tips to aggressively pay your credit card balance
Fortunately, there are ways to aggressively pay your credit card balance. You just have to make a commitment to complete the task before you.
Here are tips that will help you tackle your credit card debts this year.
Understand how it happened
First of all, you need to understand how you got into debt in the first place. Think of it as a bucket filled with water. Let’s assume you want to empty the bucket of water. Before you can empty it, you need to make sure the faucet is closed. If not, you will never be able to empty the bucket.
The same is true with debt. Even if you pay a huge amount each month, it will never be enough unless you stop the initial cause.
There are many reasons why you are in debt. Overspending is one reason. Another is the lack of emergency funds that led you to rely on credit cards. Once you have identified the cause, it will be easier to find an effective solution to ensure it will not land you in another debt situation.
Measure the gravity of the debt
After finding out the cause of debt, you need to take a closer look at the problem. It is not just the amount. Focus on your ability to pay it back. One survey revealed that 55% of US adults who own a credit card are in debt. 1 out of 10 even has more than $5,000 as their credit card balance.
The amount is bad enough because it is too big. It will be more dangerous if your financial position cannot afford to pay it back. Not to mention it will be very stressful.
Analyze your current financial position and see how you can pay off your debts. This knowledge will also help you identify the right solution that will help you pay it off comfortably despite your limited financial resources.
Research the right options
Once you know your financial situation, it is time to find the debt relief options that will help you pay off your credit card balance this year. The best way to approach this is to determine how much you can afford as payment.
If you have enough to make payments, you can choose debt consolidation or balance transfer. But if your debt situation is more serious, then you can opt to use debt settlement or credit counseling. Sometimes, getting the help of a professional makes it easier to negotiate with creditors. These debt experts can talk to creditors on your behalf and ask them to lower the interest rate on your debts.
Make lifestyle changes
After choosing the debt solution, it is time for you to pay off your debts. To do that, you need to make sure you have enough money in your debt payments funds. Sometimes, that would mean making lifestyle changes.
It does not have to be extreme lifestyle changes. But if you want to be aggressive in paying off your debts, you need to make sacrifices. The goal is to increase your debt payments so you can quickly get out of debt. It can be little things that will help you lower your monthly expenses. You can start cooking more of your meals from scratch instead of ordering take-out. You can also make an effort to save on electricity so your utility bills will go down. The little lifestyle changes can make a big difference when you combine it.
How to keep a zero credit card balance
Trying to pay off your credit card balance aggressively will require sacrifices – but it will all be worth it. Once you have paid it off, you will feel less stress and it will feel lighter on your finances.
But that does not mean you should completely relax. Keeping yourself free from debt will require effort. Again, it will require lifestyle changes. After all, the way you lived your life in the past got you in debt. Regardless of what you identified as the cause of your debts, there was still something wrong with how you spent before. So to really stay away from debt, you need to make changes.
Here are some tips that will help manage your credit card balance.
Live below your means
Make a commitment to live below your means. Living within your means is no longer enough. You need to have room for the extra money that you can use to improve your financial situation. This extra money can be used to boost your emergency fund. It will ensure that you will no longer rely on your credit card to pay for unexpected expenses.
Change your budget plan
Your lifestyle changes will be easier to implement if it is supported by the right budgeting strategy. Revise your budget plan and make sure it is updated on your current situation. You also need to make a commitment to follow it. Otherwise, you will just be wasting your time. This budget plan will dictate what you can spend on and the limits of your finances.
Stop relying on credit cards alone
Another helpful tip to avoid a huge credit card balance is to stop relying on it in the first place. Do not use your credit card for emergency situations. Save up enough cash for it. If you have to buy something small, use cash. Or you can opt to use debit cards if you do not want to use cash.
Pay your balance in full
Once you have used your credit card, make sure you pay your balance in full when the billing statement comes. This will keep it away from the finance charges. It will also ensure that your credit card balance will never grow too much that you find it hard to pay off. In the end, it is okay to keep on using credit. Just make sure that you are disciplined enough to pay it back.