Paying off your credit card debt should be a priority. Carrying credit card balances does nothing but cost you unnecessary interest payments and as a result it steals your dreams. Paying this debt off will allow you to plan for future and live the life you have always dreamed about. If you follow these simple steps, you should see your debt begin to decrease.
Make a list of your debts with the one with the smallest balance at the top of the list and the one with the largest balance at the bottom of the list. Make minimum payments on all of the debts on the list accept for the one at the top of the list. Pay as much as you can towards the account that is at the top of your list. Once the top one is paid off, you will repeat this process with the debt that is now at the top of this list. You will follow this process until all of your debts are repaid. Hopefully, you total repayment period will be less than 5 years.
The one thing you will want to do before you begin repaying your credit card balances is to contact all of your credit card companies and ask them to reduce your interest rates. This can save you a lot of money and that means less time repaying your account balances. Be firm and give your lenders convincing reasons why it is in their best interest to reduce your interest rates. Low interest balance transfers are also an option, but be aware that this takes being disciplined about not using available credit and knowing what your interest rate will be after the introductory period.
The next step is to list all of your expenses. There are worksheets that can be downloaded from the internet that will make this easy. Look for places where you can eliminate expenses. Can you survive with a cheaper cable package or less cell phone minutes? If you are like many of us, you will find where you are spending money for things that you do not need. The next part of this step is keeping a journal of your variable spending. This means recording the money that you spend each day that is not part of your fixed expenses, such as; coffee and lunch that may be purchased each day. This journal will also show you where you have opportunities to cut back on your spending.
The final step is to find ways to increase your income. Start by selling items in your home that are no longer used. Some people will go as far as getting rid of a car they are making a payment on and buying a used one with cash. Increasing your income by turning a hobby into a business or marketing a skill that you already have is an option for increasing your income. Some people choose to work overtime at the job they already have.
These tips are simple and easy to follow. Getting out of debt will take discipline, but it will give you the opportunity to live the life you have always dreamed of.
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