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Putting her first since 2013.


8 easy ways to get out of credit card debt

Credit cards can give you freedom, but they can also give you debt if you're not careful. If you’ve gotten lost in finance purgatory, here are 8 things you can do to help get you out.

8 Easy Ways to Get Out of Debt


Credit cards can give you freedom, but they can also give you debt if you're not careful. Before you know it, your debt payments are more than your income.

The result is that you live beyond your means and have a hard time keeping up with even the smallest bills. If you’ve gotten lost in finance purgatory, here are 8 things you can do to help get you out.



1. Make a Promise to Yourself

The first step is to tell yourself that it’s time to make a change in your life. You will go without your favorite extras, but getting out of debt is a long-term goal that makes it worth the sacrifices. You might need to stop buying extra toys, buy cheaper food, and eat out less.

If you resolve to do it, you have to promise yourself to keep up the payments and continue making sacrifices.

It can take several years to get out of debt, but the first step is to finally tell yourself that it’s time to make a difference in your financial life.



2. Make a list of bad and good debts

Everyone has debt, but some debt gives you advantages and is considered “good debt.” For instance, if you run a business and charge to a business account, interest could be tax deductible.

This tax advantage is only advantageous for business charges and not personal charges, so common sense tells you that you should pay down the personal account before the business one.

Credit cards are almost always categorized as “bad debt.” Subsidized school loans might have a very low interest rate, and this debt would be another one that you would pay off last. Any high-interest debts should be your first priority because they cost you the most.

Cars don’t appreciate in value, so car loans are considered bad debt, although you need a car to get around. However, the sooner you pay off the car, the better value it has should you decide to sell it.



3. Consolidate credit cards

Credit cards are what get most people into debt. If you have more than two cards and each one of them has a balance, the payments can cripple your finances.

Most cards allow you to transfer your balance from other cards with a low interest rate. Consolidate your cards into one or two with low interest rates.

Pick cards that have the lowest interest rates out of all of them. This gives you one larger payment, but you can streamline your payments into one or two every month instead of having several payments throughout the month.

But be careful; many balance transfer cards lure you in with low introductory rates that expire and then dramatically increase. Make sure you pay off your debt before the intro period ends.



4. Start with the highest interest “bad debt” card

For most people, the worst bad debt that they have is credit cards. The first plan of attack should be the high-interest card with the most amount of money.

It could be $1,000 or $10,000. Of course, higher amounts of debt will take longer, but you’ve already told yourself that you will make it happen in step number one.

High-debt cards will take longer to pay down, but they will reduce the amount of your payments significantly.



5. Ask for lower interest rates

Just because you have high debt doesn’t mean that you have bad credit. If you have a good credit score, you can negotiate your interest rate on each credit card.

You can negotiate for a lower interest rate, and then transfer balances from other cards to the new one.

Just remember that this rate only lasts as long as you pay on time. As soon as you pay late, the deal is off and the bank will increase the rate again. Always pay your credit cards on time to avoid any interest rate hikes.



6. Decide how much you want to pay in addition to normal payments

Even if it’s only $25, make a schedule that allows you to pay extra each month without harming your ability to pay other debts on time. It’s important to pay your bills on time because you have more room to negotiate interest rates and get financing in the future.

Stick to your schedule and always pay extra, but don’t financially strap yourself in a way that makes you late for other bills. If you pay late on other debt, you take one step forward and one step back.



7. Talk to consultants and do your research

Financial information can be overwhelming when you have a lot of debt. When you first start, it’s hard to determine where to start. There is so much information, so many opinions, and you don’t know which person has the best advice.

The internet is filled with information, so you have a library of data that can help you make educated decisions on your debt. Do your research before you schedule your payments. If you don’t know which debt to pay off first, ask a consultant for advice.



8. Look for support

Most people have been in a financial situation that took time to overcome. Talk to your friends, and get emotional support from family. You might find that they have helpful advice for you. It always helps to know that you’re not alone.

It can take several years to get out of serious debt, but it’s much better than filing for bankruptcy or getting into even more debt. After you succeed, your credit score goes up, you have much more money to spend on fun things, and you have better financial freedom.

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