It’s well known that paying off credit card balance every month is highly recommended, in order to avoid getting hit by high interest rates, which can take your overall credit card debt to ridiculous levels. Not to mention that this is one of the essential steps to consider for maintaining a good credit score.
However, despite this, a lot of U.S. citizens tend to carry ridiculously high balances, the average being over $10,000. As for the average credit card interest rate, it stays around 16 percent, which is very hard to ignore.
Combine these two and you can easily enter a never-ending debt cycle, which can affect you in a lot of ways, including the ability to get a job. Not to mention that opening a savings account is impossible in such situation…
Still, if you follow a few steps carefully, there is actually a way out!
Take stock
First of all, you need to take stock of all your debt and assets. Put everything on paper, so you have a clear situation and know exactly how much you owe and how much you have in income. Also, you need to be aware of what you are spending!
By doing this, you can observe a pattern and eventually figure out a way to save.
Pay small amounts
It’s recommended to make at least the minimum payment, in order to prevent your account from changing its status to ‘delinquent’, besides avoiding late payment fees.
However, in order to pay off credit card debt faster and reduce the interest, you should make more than the minimum payment and reach a point where you can pay the entire balance monthly.
Ask for help
This is something a lot of people dealing with credit card debt are actually afraid to make, from unknown reasons.
If you simply can’t make the minimum payments or are stuck behind one or two, consider contacting your creditor. They can help you set up a payment plan or even reduce interest temporarily, under a hardship plan, so you’ll be able to pay down your balance.
Do you have any other tips which can come in handy in a situation like this? Let us know, by dropping a few lines in the comments section below!
