Tips To Deal With Credit Card Debt

By BankBazaar | August 30, 2016

Tips to pay off credit card debt

Feel like you are stuck in a rut with your Credit Card debt? Each time you try to pay off the debt, you end up swiping your card again, thus, ending up with more debt than before? Well, first things first, you aren’t the only one, so don’t let guilt get the better of you. In fact, if you read these tips carefully and implement them (without cheating), you can get out of your Credit Card debt. Yup, you read that right! It can be a little difficult in the beginning, but it’s all for your own good.

So, here are a few tips to clear your Credit Card debt.

  1. Pen down all your debts

Sounds simple, right? But trust us, it’s easier said than done and many may back out right at this step. So, what to do, you ask? Get a clear picture of your finances. Write down all your debts to know the exact figure of how much you owe. If you are the more tech-savvy kind, list your debts on an excel sheet.

As long as the figures were in your head, they didn’t seem that monstrous, but as soon as they are out of your head and onto the sheets, they may seem scarier. However, don’t worry, as you have successfully passed the first step.

Additional Reading: How to Manage Money When Drowning in Debt

  1. The income and the outflow

As redundant as this might sound, it’s very important to understand the inflow of all your money and how it is spent. So, we’d suggest that you make a list of these details too. While your income could be restricted only to your salary, or you may have multiple sources of income, like rental income, among others, the list of expenses is certainly going to be longer. Write down all your expenses such as rent, loan EMIs, groceries, transportation, etc.

If your expenses are more than your income, you are certainly headed towards financial doom. If not, then there’s hope, a lot of it actually. Start by monitoring your expenses and try to save on every little thing that you can, be it your lunch money, or cab money, or even groceries.

  1. Plan and strategise

Now that you have everything listed down, it’s time to set financial goals. Positive ones. But they ought to be realistic. You can start by fixing due dates for each of your Credit Cards. You can aim to clear the debt of one card in 6 months, and the second card within a year and so on.

So how do you go about doing this? Well, list out all your Credit Cards starting from the one with the highest rate of interest. You can either start clearing your debt by paying the Credit Card dues of the card with the highest interest rate, or ones with the highest outstanding balance. If you start with the former, you will clear your debt more rapidly.

Additional Reading: How To Be A Responsible Credit Card User

  1. Check if you are on track

Well, it’s not just the planning that’s important but also implementing it and keeping a track of it. If you go a little off the track, it’s fine. However, make sure that you re-adjust your goals accordingly. If you are achieving your financial goal of clearing your Credit Card debt as planned, then you are certainly on the right track and deserve a pat on your back!

  1. Balance transfer is always an option

If you think a balance transfer could help with your situation, go for it. Of course, your Credit Score still needs to be in check. A balance transfer Credit Card will allow you to transfer all your debts to a Credit Card with a zero or low interest rate. Make sure you read everything about the Balance Transfer Credit Card before zeroing in on one. Also, don’t make new purchases on that card.

Additional Reading: Balance Transfer Between Credit Cards: Things To Consider

Well, so come on now, start listing your debts, income and expenses already!

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Category: Money Management
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