The benefits of getting out of debt can include a higher credit score, better interest rates on loans and increased personal savings. While many people wish to pay off their credit card balances and get out of debt, achieving this milestone is often challenging. Eliminating credit card debt requires a plan of action. Several techniques can put you a step closer to paying off your credit card debt.
Instructions
- 1
Put credit cards in a safe, secure location. Easy access to credit cards can increase the temptation to spend. Put your cards out of reach by storing them in a locked safe or box.
2Contact your creditors and ask if they will reduce your present interest rate, or shop around for a low-rate balance transfer credit card and move your high-rate balances to it. You will become debt-free sooner by reducing how much you pay in interest charges each month.
3Pay more towards your debt. It can take years to pay off credit card debt with only the minimum payment. Rework your finances in order to pay more on your debt each month. For example, if your card company requests $20 minimum payments, pay $40, $60 or more each month to knock down the principal quicker.
4Eliminate your credit card debt using your federal income tax refund or employment bonuses.
5Cut back on spending to increase extra income. The money you spend on entertainment and miscellaneous shopping can help you get rid of credit card debt. If you normally spend $200 a month dining out, eat at home and then put the savings toward your credit card debt.
6Make nonessential purchases only when you have enough in savings as opposed to using a credit cards for instant satisfaction. If you want to buy an expensive item, save your money first.
7Borrow from your home equity to eliminate credit card debt. Talk to your mortgage lender about a low-rate home equity loan to pay off high-rate credit card debt. With a lower rate, you'll save on payments each month, and with a fixed term you can pay off a home equity loan in a few years.
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