Unlike the nighttime boogeyman that disappears at the crack of dawn, the credit card debt monster is always present, consuming the good credit fortunes of countless consumers. You can vanquish the credit card debt monster one step at a time, by incorporating the following strategies.
1. Tackle the worst debt first. Which is worse: the debt with the most significant outstanding balance or the one with the highest interest rate? That would be the latter as the second debt accumulates a greater percentage of interest and at a faster rate than the first.
You must prioritize your debt to get this monster under your control. Begin by paying down your highest interest rate credit card first while making at least the minimum monthly payments on your other outstanding balances. Once the first debt has been paid off, then turn your attention to your second debt and so on.
2. Avoid taking on additional debt. Yes, new credit card offers always seem to pepper your mailbox, perhaps even your email inbox. Those appeals may be attractive especially if a balance transfer offer at zero percent financing is a part of the package.
Resist taking on new debt at all costs. Even with a balance transfer you will have to pay fees and likely you will borrow more money than the transfer amount and find yourself deeper in debt. Ignore this monster’s siren call!
3. Just pay cash. Here is a not so novel idea: pay cash for your future purchases. Certainly, that means you will not be able to buy some items you want right now. Then again, access to easy credit made such purchases all too simple for you in the past and is what put you into deep debt.
Living on cash purchases may seem tough, but it is the discipline you need to have if you are to tame the debt monster. If carrying around cash to make grocery purchases or to fill up your car’s gas tank is more than just an inconvenience, use a debit card and make sure that you record each transaction in your checkbook.
4. Meet with a credit counselor. There are times when going to battle against life’s monsters is not something you can or should do by yourself. If you are overwhelmed by debt, a credit counselor may be able to see you through your difficulties.
The Federal Trade Commission notes that, “most credit counselors are non-profit,” thus the cost for such services should be tied in with what you can afford to pay. Seek referrals and check references as you want a credit counselor who will finish the battle with you.
Credit Considerations
Obtain copies of your three credit report from Experian, Equifax and TransUnion to verify that the information about you is correct. Sometimes, the debt monster is not entirely of your own doing as incorrect information, including fraud transactions, may be worsening your plight.
See Also — What You Need to Know About Debt Consolidation
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