Help! I’m In Credit Card Debt!
Credit card debt can happen for many reasons: maybe you have lost your job or are going through a tight financial period; maybe you have had an unexpected (but lovely!) addition to the family; maybe you had a big wedding to pay for, or university tuition; maybe you just had too much fun this summer!
Whatever the reason (and the reasons can be endless), credit card debt can happen to anyone. But, once you find yourself in that situation, the best time to act it now! The longer you wait, the worse it will get – think of that building interest. No thank you!
So, what should you do if you find yourself in credit card debt? Here are some suggestions to help you out:
1. Pay off your credit card as soon as possible!
Preferably, you can pay it off immediately but that may not be possible. If you can’t pay it immediately, it must become the priority. Every dollar that is not a necessity for living should be going to your credit card payment. Don’t let that interest build!
2. Stop using your credit card immediately!
You should go on to a cash diet right away. Get rid of that credit card and the temptation it brings. Time to budget very carefully!
3. Take out a low interest loan to pay off the credit card.
Credit cards have notoriously high interest rates. Talk to your bank or lender to see if you qualify for a low interest loan. Then use the loan to pay off the card. Yes, you will still have debt but hopefully you’ll be working with a much more manageable interest rate. Again, we don’t want the interest to continue to build!
4. Call your credit card provider and see if you can negotiate a lower interest rate.
You’re probably still better off getting a low interest loan because likely if your provider can and will lower your rate, it won’t be low enough to compete with a loan. But you never know, check both options out. Also, if you don’t qualify for a loan, this could be a good way to go.
5. Start saving to pay off this loan!
Just like in #1, all extra money should be going to the debt. No more coffees or eating out, stop using your dryer (and hang your clothes to dry), bike or walk (instead of driving or using transit), start shopping the grocery flyers for deals, etc.
Remember, credit card debt can be beaten. It’s not easy and it will require hard work but you can do it. And it will be so worth it!
Do you have any suggestions that have helped you when you had credit card debt?
Photo via iStock #000024086772