How to Rise Above the Average Credit Card Debt

Getting through credit card debt can be a real challenge. It has a tendency to stick around, stubbornly refusing to leave and sucking money out of the rest of the household budget. The main problem with credit card debt is that it tends to have such a high interest rate that it is hard to overcome it and make large enough payments to make progress. In this post, we will go over some strategies for getting out of credit card debt and moving on with your life.

First of all, is it one credit card or several? If it is several, there are a few ways to tackle the debt. First of all, try the interest rate target strategy. Pick the card that has the highest interest rate and focus all of your extra money on paying that one off first, paying the minimums on your other cards. That way, you will get rid of your interest as fast as possible. This is the most efficient strategy in terms of getting out of debt fast. There is also the snowball strategy. The snowball involves paying off the card with the smallest balance first, then the next smallest, and so on. That way, you have short-term goals that you can meet right away, and it feels more psychologically rewarding as you check off each card.

If you only have one card, or even if you do have multiple cards, then you need to think about how to resolve the situation in the long term. If you do not change your spending habits, then you will just get into debt again. There are two things to change- spending less and earning more. Most people find it easier to spend less rather than get a new job or get more hours. Again, there are many possible strategies to help get your spending out of control. For example, you can divide up your money into envelopes at the beginning of each month and label each envelope with a purpose. When the leisure envelope is empty, no more money can be spent on that category. If it is the cards themselves that seem to be causing the problem, try freezing them into ice or closing out your accounts. Anything that takes away the impulse to spend will help. This is for your own protection: you will know what you are comfortable with doing if the time ever comes.

The basic idea is that credit card debt is something that is possible to escape in the short run, but without developing strong personal financial skills, you will just fall into debt all over again. It is easy to say why- if you buy too much stuff on impulse then no strategy will overcome that, aside from self-disciple. This is especially problematic if you use one-time resources, like an inheritance, to pay off credit card debt. The debt has a way of creeping back up again if you are not careful about it.

The high interest rates are the biggest reason to worry about credit card debt, but it does not need to consume your life. Simply take control and stay on top of any and all debt in the family. Without a clear debt strategy, you will have no guidance and will likely stop trying to pay back the money before the debt is gone. That’s a dangerous situation. The high rates means that credit card debt multiplies much faster than anyone expects. Bankruptcy is not necessarily a good option because it ruins your credit score for seven years. You need to cut down and prepare to put more discretionary income towards debt if you hope to climb out of the hole in the neat future.