Lately we have heard that poor credit has been increasing with a special emphasis on consumer credit. As we all know credit cards are included in this large family of consumer credit and are one of the main causes of family budget slippage.
Despite all the advantages of having a credit card, if it is not properly and responsibly used, the consequences can be catastrophic. Today you will know how to Eliminate Credit Card Debt simply and effectively.
Debt is Your Main Goal
Making your primary goal of paying off all credit card debt is an important step, as most of the time, you start by paying the minimum and you keep that decision.
Create a Family Budget
If your personal finances are disorganized, start by arranging them and you will see that there are ways to secure an extra every month for credit card payment. Most people when organizing their personal finances find extra money because they have a proper accounting and there is no room for slips. If you need support in managing your budget we suggest you download our excel tools.
Never Pay The Minimum On Your Credit Card
If you think you’re going to pay your credit card for just the bare minimum, forget it. You’ll never get it. One of the strategies of banks with the existence of the minimum payment is to keep their debt almost forever and thus earn a lot of money.
Always pay more than the minimum and now see the example of how much time you need to pay 1,000 EUR using the minimum payment:
- Divide: 1,000 EUR;
- Minimum Payment Percentage: 3%; 5%; 10%; 15%
- Minimum Monthly Payment: EUR 10 ( Where the minimum percentage is applied the value returned may not be less than EUR 10 )
Stop Using Your Credit Card
It would not make sense to apply a credit card debt settlement strategy and continue to use the same, so it seems basic to me this tip.
Avoid Hanging with Spending Friends
Going out with friends is good for health and increase well-being, however, hanging out with friends who like to spend without limits is bad for your wallet. If using the credit card for these purposes is bad for your purpose.
Have an Emergency Fund
We have already talked about why you should have an Emergency Fund and the payment of the credit card should be one of the reasons to set up an Emergency Fund and to use it. However, the purpose here is different because as soon as you start planning to eliminate card debt there will be no room for savings, however, unforeseen events happen and you will need money to solve hence the importance of an Emergency Fund.
Review All Your Goals
Always bearing in mind its objectives is an incentive to achieve. Write down your goals, step by step, and take them always with you and whenever you have a consumerist temptation, see the objectives. Possessing a quantifiable target list also helps the achievement, because if the goal is zero credit, then while not at zero is in the race.
As you can verify it is all a matter of will and discipline and you will be able to eliminate credit card debt without difficulties. As a bonus you will still have greater control under the impulse of the credit card and in the future will manage better your Personal Finance.
Managing our money is a challenge. It is not easy but it is not too complex either. A few rules and a lot of rigor. To improve your skills in managing your money why not join free with your friends in a training action in personal finance?