Eliminate Credit Card Debt With This 3 Effective Debt Payment Strategies
Are you drowning in credit card debt?
Although my first formal job was as a credit card salesperson, and I knew exactly how they work, I quickly got caught up in them. I came to think that it was normal to have debts and that the only way to have something was to buy on credit.
Once we have recognized that we have a problem and decided to fix it, the next step is to know the exact financial condition we are in before proceeding to debt repayment. For this, we must make a complete list of all the debts we have, both legal (signed in contracts) and honorable (loans to family and friends made with our word).
This list of credit card debts must include all possible information, at least:
- To whom is owed (name of institution)
- The total amount owed from each
- Minimum monthly payment
- Annual interest rate
- Contact person.
Create an action plan
When we have the complete list of debts on paper, it is necessary to implement an action plan that allows you to take steps to get out of debt. This action plan is made up of no more debt. Otherwise, all other efforts will be useless.
Generate surpluses to be used for debt payment; some ways are:
- Minimize expenses. The higher the commitments, the stricter you must be in spending money.
- Increase income with secondary jobs, overtime, etc.
- Sell assets that can speed up our debt payment process.
Make the credit card debt payment plan as follows:
- The list of debts order it from the lowest debt to the highest
- Negotiate with creditors to have the lowest monthly payments.
- Pay the monthly minimum of all debts and the surplus we have generated and pay it to the smallest debt.
- By paying off the smallest debt in full, we add what we paid to the next smallest debt.
- So on until all debts are paid in full.
- When you finish paying all the debts, the money used to pay debts must now go to savings.
Once you have managed to pay all your credit card debts, you must promise not to acquire another debt. That simple promise will make you live a debt-free life, which is no small thing today.