How to eliminate credit card debt? – That is a question that is asked by a number of individuals around the world. These are the individuals who somehow (mostly due to out of control spending) landed into the mouth of this monster called ‘Credit card debt’. So what are the best ways to eliminate credit card debt?
If you want to learn how to eliminate credit card debt, you have already reached 50% of your goal because your decision to eliminate credit card debt is the very first and the most important step towards you being able to wipe out credit debt. That being said, it is very important to mention that you also need to be firm on this decision and stick to it with complete sincerity and seriousness, till you finally learn how to eliminate credit card debt (and even after that).
If you want to get rid of credit card debt, you will need a plan. This begins with analysis of current situation in terms of your debt and your finances (current and as expected in near future). So to get rid credit card debt, you need to first check the amount you owe on the various credit cards that you currently have. Just use a notebook to jot down the amount you owe on each credit card and the corresponding APR associated with each of them. Once you have this information on hand, you can then total up the various amounts to get the total amount of your credit card debt. After all, you can’t wipe out credit card debt if you don’t know how much there actually is.
The next thing that you want to do is see if you have enough cash handy e.g. in your various bank and savings accounts, which you can put to use to help get rid of credit card debt (of course, you will need to take a view on how much cash you will need to fulfill your day to day expenses and specific future needs). If you find that you have enough to wipe out credit card debt completely, just go ahead and get rid of credit card debt and earn your peace of mind. However, if you can’t wipe out your credit card debt completely, check the amount that you can use to reduce credit card debt partially.
Next step, as you might have guessed, is to check how best you can use this amount to wipe out credit card debt (even if partially) i.e. which portion of credit card debt should you eliminate first. So, the first thing you want to do is remove credit card debt on the credit card which has the highest APR and which is hitting you the most. And then after that you will want to get rid of the credit card debt on the credit card which has the next highest APR and then so on and so forth. If you are incurring additional late fees etc on some of your credit cards, you may decide to reserve some amount to make the minimum payments on those credit cards (before you finally eliminate credit card debt on them all together).
What we have just seen is some basic analysis and first steps on how to get rid of credit card debt. You might need to take some other steps to wipe out credit card debt e.g. consolidation of credit card debt is another option, but something that is not recommended and only be done as a last resort. However, it’s imperative to understand that any and all methods and steps you take when learning how to eliminate credit card debt will fail if you don’t inculcate controlled spending habits.