Did you know that the average American has a credit card balance of approximately $6,375? Or how about the fact that total credit card debt in the United States has exceeded $1 trillion?
With numbers like these, it’s easy to see that credit card debt remains a major problem for many US consumers.
If credit card debt has become a problem in your life, it’s time to take action. Rather than pay the minimum and hope for the best, there are steps you can take to regain control of your finances.
Here are five tips to guide you:
1. Gather All the Necessary Information
How many credit cards do you have? What’s the balance attached to each one? What’s the interest rate? How about the minimum payment amount?
Before you can make any real progress you must understand the ins and outs of your current situation. Answering these questions, among others, will allow you to do just that.
2. Create a Budget
This is important for one primary reason: it allows you to prevent a situation in which you’re continually adding more debt.
With a budget in place, you’ll know exactly how much you earn and spend each month. Subsequently, you can alter your approach to ensure that you’re not overspending on your credit card.
3. Contact Your Credit Card Company
If you’ve tried everything and realize you can’t pay down your credit card debt, it’s time to contact your issuer.
Explain your situation, ask for feedback, and do your best to negotiate your debt down to a more manageable number.
While it’s not always easy, there are steps you can take to increase the likelihood of settling your credit card debt for less than what you owe.
Remember this: you’ll never know if your credit card company is open to this idea until you ask.
4. Consider a Balance Transfer Credit Card
Do you have debt spread across multiple credit cards? Have you come to find that you can’t keep up with all the payments?
With a balance transfer credit card, you can bring all your credit card debt under the same roof. This allows you to:
- Save money on interest
- Better organize your debt and payments
- Take advantage of a zero percent introductory rate
Once you understand how a balance transfer works, you can compare the pros and cons to determine if it’s right for you at the present time.
5. Don’t Give Up
Even if you’re stressed about your debt and wondering what to do next, don’t give up. If you do, it’ll only make things worse in the long run.
By implementing a plan and sticking with it, you’ll soon begin to realize that you’re taking small steps toward your end goal of being credit card debt free.
Forget about the past and focus your efforts on the future. By doing so, you can take steps to reduce your credit card debt. As a result, you’ll have more money to invest in your future – and there’s no greater feeling than that.