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How to Pay Off Credit Card Debt Fast

credit-card-debt

When people are carrying around a substantial amount of credit card debt, they sometimes have difficulty just getting started paying off that debt.

Being in a lot of debt is not fun. One form of debt that can really sting is credit card debt. When you have a lot of debt to get rid of, it can be easy to get frustrated quickly, but feeling overly anxious about your debt isn’t going to help you pay it off any faster. So what is the best approach to eliminating your credit card debt?

A quick Google search of “how to pay off credit card debt” will give you over a hundred different answers. The truth is that different methods work better for different people. You need to understand your own personality and spending habits in order to choose the best option for you.

Are You a Compulsive Buyer?

compulsive shopping

Many people combat feelings of stress and anxiety by shopping compulsively. If you are a compulsive buyer than you might also have a lot of credit card debt. The only problem is, you’ll need to tackle your compulsive buying habits before you can bring down debts. If you can admit to yourself that you’re a compulsive shopper, then you can craft your debt strategy with this in mind.

Step 1: Cut Up Your Credit Cards

To ensure you don’t keep adding to your debt, you can start by cutting up your credit cards. If you don’t have any credit cards in your wallet, then you won’t be able to spend that available balance and rack up your credit card bills even higher.

Step 2: Tackle the Compulsive Shopping Urge

Another trick is to come up with an activity that you can turn to whenever you feel the urge to spend compulsively. It could be anything! Maybe you can turn to gardening, reading a book, or going for a walk whenever you feel stressed or sad. The point is to teach yourself to do healthier things when you feel stressed or want to have fun instead of spending money.

Other Pastimes to Replace Shopping:

  • Gardening
  • Reading
  • Walks
  • Hikes
  • Biking
  • Swimming
  • Cooking or baking
  • Volunteer
  • Sewing, Knitting, crocheting
  • Do puzzles
  • and so much more!

Identify Wants and Needs

wants and needs

Another part of what makes you unique is that you have your very own wants and needs. Your list of wants and needs is going to look different from another person’s wants and needs. For example, if you work in fashion then buying new clothes might be one of your needs while for most people that would be a want.

Step 1: List Wants and Needs

First, make a 2 columned list of all your basic wants and needs. It’s ok to have unconventional wants and needs so long as you can identify them. You need to be self-aware of your own wants and needs because you won’t get out of debt unless you avoid unnecessary spending on things you don’t need.

Step 2: Compare Past Spending with the List

Take a close look at your spending statements for the month and compare it to your list of wants and needs. How much was spent on wants? I bet you’ll discover that you have plenty of room to cut out unnecessary spending. If you understand what your needs are, then you won’t feel bad about spending money on them. On the other hand, you need self-control to avoid spending too much on wants.

Focus on High Interest Rate Debts First

credit card debt

The trick to paying off credit cards fast is to first pay off the card with the highest interest rate. This won’t necessarily be the card with the biggest balance. Dave Ramsey suggests you pay off smaller debts first and work your way up to the bigger ones. But focusing on high-interest debts first is also a wise choice so you can avoid spending as much on the accumulated interest.

By paying off the cards with higher interest rates first, you will lower the amount you pay to the credit card companies in interest, ultimately reducing the overall amount you’ll wind up paying. So your debt will be paid off faster and at a lower cost. Keep all other payments at the minimum, and once you’ve paid off the worst offender, move on to the next-highest interest rate.

Don’t Give Up

People make mistakes, and if you slip up along the way don’t give up on your overall goal. If you stumble then pick yourself up and continue on the path to financial stability.

“There is no failure except in no longer trying.”

―Elbert Hubbard

Ultimately, you only fail if you stop trying. Debt can really weigh borrowers down. Sometimes it takes years to pay off debts. But if you stick to the best financial plan for you, you can begin to see the light at the end of the tunnel and turn your finances around for good.


How to Reduce Your Credit Card Debt

When you know that you need to reduce your credit card debt, you should understand the importance of learning about your debt. This may sound strange, but you want to be familiar with the fine print and with the details of your credit card debt. Start by understanding the interest rate associated with each of your credit cards. When you know how much interest you are paying on each of your credit cards you will want to start by paying off your card with the highest interest rate. In addition to paying off your credit cards with the highest interest rates, it’s also important to get any short term loans or cash advances paid off as soon as possible.

Pay Off Your Highest Interest Loans First

While you are paying off your highest interest rate, you should be well aware of the necessity of paying much more than the minimum payment. The minimum payment will be a very small fraction of the actual debt that you owe. Allocate as much of your resources towards your highest interest rate as you can. To do this, you may want to find other areas of your financial life that you can cut. Finding ways to save money in other areas of your life will ensure that you are out of debt as quickly as possible.

As you are working on making those payments, you should understand the importance of being on time. Being in a lot of debt can have a negative effect on your credit score and making late payments can make your credit score even worse. You will want to make sure that you make your payments on time and that you are doing all that you can to pay off your high interest rates quickly.

After you have paid off the card with the highest interest rate, you will then want to move to the card with the next highest interest rate. Continue paying off your cards so you can be sure that you are minimizing your interest rates as quickly as possible.

Once You’ve Paid Off Your Cards, Adjust Your Spending

Once you have paid off your credit cards, you will then want to make sure that you can adjust your spending habits to keep yourself in a great financial position. There are many people that struggle keeping their spending habits under control when they see the extra money in their bank accounts.

After you have paid off your debt, you will want to create a saving and spending plan for yourself. The saving and spending plan that you create will ensure that you are going to save the money that can help you and also be able to provide for yourself. Working with a financial advisor is a great way to ensure that you are going to have a reasonable budget for yourself. The budget that you create should allow you the opportunity to save money and spend it.

Reward Yourself

Splurging on yourself and spending money on things that you want can be a great way to help you achieve your goals. Working to achieve your financial goals may take time. Long term goals can be frustrating in the beginning, but will be well worth it in the long run.

Mastering your finances may take time but it is important that you are patient with yourself. There are a lot of people that give up on mastering their finances simply because it is too overwhelming in the beginning. While you are working on achieving your goals, you should ensure that your goals are achievable.

Make the goals something that you can track to ensure that you are going to know when you are making progress. As you continue to track your progress you may want to set up some mini rewards for yourself throughout the time that you are working on accomplishing your main goal. These rewards can help you stay motivated toward your main goal.

Financial freedom is something that is well worth the time and effort that you are putting into your goals. When you are not in debt, you will have all of the money that you are earning to be able to save and spend accordingly. Take the time that you need to set up a plan for yourself or with a professional to set up your plan. Getting yourself out of debt and ensuring that you know how you are going to keep yourself out of debt will be your best option.

Seek out Help If Necessary

Finally, don’t be afraid to reach out for help when it comes to your finances. When your finances start to feel overwhelming, you should do all that you can to get yourself out of debt. Work with a professional, work with a trusted advisor or even with a family member to ensure that you are out of debt as soon as possible.

Climbing Out of Credit Card Debt

Getting out of credit card debt can feel like an insurmountable challenge, but if you give yourself time to accomplish your goal and if you go about accomplishing your goal properly you may find that you are able to get rid of your credit card debt a lot faster than you would have thought. There are some simple steps that you can dedicate yourself to and these steps should help you get out of debt and be on your way to financial freedom in no time.

Evaluate Your Current Debt

First, you will want to start by evaluating the debt that you are in. Make sure that you go through all of your financial documents and take the time that you need to assess your financial situation. You should understand how much debt you are in and make sure that you know what your interest rates are for each line of credit that you are using. When you know what interest rate is the highest, you can pay down that line of credit quickly to ensure that you are only spending a minimum amount of money on interest as you are paying off your debt.

Create a Budget You Can Stick To

Second, you should be sure that you can create a budget that you will stick to. Creating a budget can be difficult if you are not used to the process, but it is important that you understand how to allocate your money. Allocating your money properly will ensure that you have leftover money to pay off the debt that you have gotten yourself into.

Creating a plan to pay off your debt will ensure that you are going to be making progress toward your goal. It is important that you set a goal for yourself and that you also map out how you are going to get to your goal. When you know how you are going to get to your goal, you can take each step, one at a time, rather than getting overwhelmed with a goal that is too large.

Debt Consolidation Can Make Budgeting Easier

You may find that it is easiest to manage your debt by consolidating the debt. As you take the time to consolidate your debt, you won’t have to keep track of a payment schedule for more than one payment. With a consolidated debt, you will be able to make one payment every month and be sure that you are staying up to date with your debt payments.

Many people do not realize that they may be able to save a lot of money by simply talking to their creditor. When you have an open dialect with your creditor you may find that you are able to get your interest rate minimized and save a lot of money in the future.

After you have gotten yourself out of debt, it is important that you know how you are going to stay out of debt. Once you are out of debt, you want to make sure that you keep the good habits that you were able to establish throughout the time that you were paying off your debt. When you have established these habits, you may want to write down what works the best for you. Whether printing out a weekly budget works the best for you or taking out cash so you do not use a debit card works best, you should understand how you are going to keep yourself within the parameters of your budget.

Staying within your budget may seem like it is restrictive, but being able to use your money as you please rather than pushing your money toward a monthly payment that you need to make is freeing. Staying within your budget allows you to allocate money toward the bills that are necessary and then the expenses that may not be necessary but that you want.

Doing all that you can to work through your budget and develop a healthy outlook on the money that you spend is a great way to ensure that you are in control of your finances.

If you feel that your finances are out of control, you may want to talk with a professional debt counselor. You can work with someone that will help you figure out the best plan of attack for your debt. With the help of a professional, your debt may begin to feel more manageable and you can be sure that you are able to use your money as you see fit.

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