How Can I Pay Off Credit Card Debt?
If you are stuck in credit card debt and are looking for ways to tackle your maxed-out credit cards we have some easy methods for getting your credit card debt under control. If you are ready to pay off your credit card debt once and for all these methods can help you get out of debt:
Set a Goal: In order to stay motivated and on track for getting your debt on your credit cards under control you should set obtainable goals that help you stay on track.
Your main goal should be to pay off your highest interest cards first, which can take time and discipline.
You should monitor your progress carefully and on a regular basis to keep your motivation level high for continuing to pay down your credit card debt.
Cut Your Credit Cards Up / Put Them In a Safe Place: In order to begin tackling your credit card debt you need to be disciplined, which includes taking your cards out of your wallet.
You should put your credit cards away in a safe place.
When you use cash instead of credit it will be harder to spend compulsively and you will keep greater track of your spending.
Spending cash helps you separate needs from wants.
If you feel that taking your cards out of your wallet is not enough you can destroy the cards, or freeze them in your freezer until you are completely debt free.
Make a List of Your Debts to Prioritize Your Debts: By listing all of your debts you can prioritize your debts in the order of their importance.
You should have your mortgage payments, vehicle loans, and highest interests debts at the top of your priorities.
It is important that you prioritize your debts in a sensible order for you so you can be out of debt as quickly and easily as possible.
Create a Budget: When you create your monthly spending budget, you will ensure that you are living within your means, which will help you stay out of more credit card debt, and allows you to see where you spending your money.
Having a budget can help you see how much you have available to pay towards your debt each month, which can give you a timeline for when you will be out of debt.
Cut Expenses: When you create your budget you will likely be surprised at the amount you are spending on ‘wants’ rather than ‘needs.’
Cutting these, and other large expenses, can make a serious debt in your debt, especially if you are still using your credit cards to pay for these ‘wants.’ Simple changes, such as making your coffee at home, can result in a substantial savings over a period of a year.
Simple changes, such as making your coffee at home, can result in a substantial savings over a period of a year.
Pay Down Your Debt With Your Savings: If you are like many Canadians, you might regularly contribute to a savings plan.
While this can be beneficial, and it is always good to have some savings for an emergency, you should consider paying down your high interest credit cards with any savings you can spare.
You will save more money by paying off your high interest debt than you would have made on interest on your savings account.
Apply for a Debt Consolidation Loan: If you have a good credit score you might be able to apply for, and be approved for, a debt consolidation loan.
This loan allows you to combine all of your high interest credit card debt into one lower rate, easy to manage loan payment.
You won’t have to worry about missed payments hurting your credit score, and you could save thousands in interest charges and be out of debt months sooner if you can combine your debts into a low interest debt consolidation loan.
It is important you carefully research the terms of the consolidation loan so you don’t accidentally end up paying more than you would have through hidden fees and other service charges.
Refinance Your Mortgage: If you have enough equity in your home, it might be possible for you to consolidate your debts into your mortgage debt.
This can help you save on interest charges but if you decide to go this route make sure you speak with a professional other than your lender for advice – as they have an interest in having you choose to refinance your mortgage.
Make sure you make a budget if you consolidate your credit card debt into your mortgage debt to save for future emergencies and to create an emergency savings fund.
Make a Strategy for Paying Down Your Credit Card Debt – Strategy 1: The best strategy for getting out of credit card debt is to prioritize which credit cards to pay off first.
After paying the minimum payments on your lower interest cards you should make as large a payment as your budget can afford on your highest interest credit cards.
As your higher rate cards are paid off you can work towards becoming completely debt free, while saving on interest charges.
Make a Strategy for Paying Down Your Credit Card Debt – Strategy 2: Another strategy for paying your credit card debt down is to pay the smallest balances off first as this can give a sense of accomplishment which can help you stay motivated to pay your debts on your credit cards off.
If you feel that your credit card debt is overwhelming you and you need professional help for making a plan to deal with your debt you can speak to our licensed insolvency trustees about your options.
Call us at 1-877-879-4770 24/7 to arrange a free and confidential evaluation to learn your options for handling your credit card debt including making a consumer proposal, filing bankruptcy or another alternative to bankruptcy a trustee can assist you with.
We provide confidential, caring, non-judgemental and friendly advice for individuals trapped in serious amounts of credit card debt.