Do you have mountains of credit card debt? You’re not alone
Nearly half of Americans are crippled with credit card debt, according to a Go Banking Rates study. Debt stinks, and it’s usually not the borrower’s fault. I’ve personally had credit card debt that I couldn’t afford to pay off — it piled up not because of excessive spending, but due to unforeseen emergencies.
When faced with situations where finances are tight and debt just keeps growing, it’s easy to feel hopeless and powerless. Climbing out of debt isn’t easy, but with determination, help from experts, and tightening up your budget, everyone can achieve the goal of being debt-free.
1. Stop Using Your Credit Cards and Set a Budget
Unsurprisingly, limiting credit card use is the best way to avoid increasing your credit card debt. It seems simple enough, but way too many people rely on credit cards, spending beyond their means because money isn’t disappearing from their accounts.
Physically removing your credit cards from your wallet is a great way to start because you won’t be tempted to use them. If literally freezing your cards in ice doesn’t help, you can have your bank freeze your credit accounts until you are in a better financial position.
We recommend you set a budget for all necessities to ensure that you’re spending only what you can afford without using credit cards. Check out our budgeting article for additional help on budgeting correctly.
We recommend not freezing all of your credit cards at once because you never know when you’ll need them for emergencies, but this is the best way to start reducing your credit card debt.
2. Trim Your Expenses
There’s a good chance you need to cut some expenses if your credit card bills keep piling up. The less you spend, the more you can throw at your debt.
Take a step back and look at how you are spending your money and see if you can reduce some of it. Here are some common ways:
- Cancel subscriptions you are not actively using.
- Eat out less and meal prep.
- Reduce utility bills by using fewer utilities.
There are many ways to do so, and if you need help with identifying what to cut out, check out Hiatus App. With this app, you can see where your money is going and cancel subscriptions from the app. Using the app has saved me so much time and money. I highly recommend it!
Hot Tip: We recommend using an app like Hiatus to keep track of all expenses and trim unnecessary ones. You’ll be surprised at how much you can save!
3. Choose a Payment Strategy
It’s always a good idea to have a plan. Credit card debt can be managed over time even if it seems unmanageable and hopeless.
The most popular plans for becoming debt free are the avalanche and snowball methods, check out our article here for additional information.
No matter which plans you choose, we recommend crunching the numbers: take into account your interest payments and debt amounts. Then pick a place to start chipping away at your debt.
4. Consider Debt Consolidation
If you’ve tried the above steps and still can’t seem to get out of debt, you may want to consider debt consolidation.
Debt consolidation companies take on your debt and give you a way to pay it back. A company that’s helped millions of people is GreenWise. All you need to do is fill out your information and give insight into your situation, and they’ll be able to help you.
Debt consolidation helps millions of Americans, but be sure to do your research and stay on track with payments so as to not accrue more debt.
Credit card debt sucks, but it’s not impossible to get rid of it. These four ways have helped me personally navigate and defeat credit card debt. It takes determination and sacrifice, but there’s no better feeling than conquering your debt.
If you find yourself in unmanageable debt, work with a debt consolidation company like GreenWise – just be sure to stay current with your payments.