It happens to many well-meaning people; credit card debt can sneak up on anyone. It may take a little know-how to get yourself out of this sticky situation. There are ways to manage credit card debt without having to live on ramen noodles for the duration of 2018. The experts at Broussard Poché, LLP offer these 4 ways to get out of credit card debt.
- ADD UP ALL DEBT
You need to know the total amount of debt you are carrying across all accounts. Consider online tools and apps to help you keep track. Research any app you decide to utilize and make sure your financial information will stay secure
- CONSOLIDATE YOUR DEBT
This strategy lumps all of your payments into one. It’s easier to keep track of and you may feel like you’re making progress at a faster rate. You can automate payments so you don’t have to worry about paying late. Just note that the debt doesn’t actually go away—consolidation just simplifies the payment process. As with all debt payment processes, paying more than the minimum payment is the only way to make any headway against the debt.
- AVOID LONG-TERM INTEREST
This bears repeating: don’t just pay the minimum. The point is to get your debt paid off quickly to avoid unnecessary interest charges. If you are only paying the minimum you owe it could take years or even decades to get rid of your debt. Depending on your interest rate, that means you will spend precious dollars on interest payments and not principal payments.
- DEBT SNOWBALL METHOD
The Debt Snowball Method really works and thousands of people use it to get out of debt every year. Here’s what you need to do:
• List all of your debts from the smallest balance to largest (leave out your mortgage)
• Budget to pay the minimum payment on every debt
• Then calculate out how much extra you can put towards paying off your debt
• Pinpoint the debt with the smallest balance, pay the minimum PLUS your extra money
• When that debt is paid off, roll over all of that money into the next smallest debt (old amount +minimum)
• Repeat and keep rolling over payments until all your debts are gone
It’s can be scary to look at all of your debt at once, but it will be beneficial to know what you are up against. Use 2018 to make real progress against credit debt!