A 2019 poll by Experian showed that the average U.S. consumer is holding over $6,000 in credit card debt. Considering the high interest rates that come with credit cards, this can keep individuals stick in a dangerous cycle of having to take on more and more debt just to get by. But it doesn’t have to be this way. Here’s how to defeat credit card bills. This blog will tell you about How to Defeat Credit Card Bills.
Budget All Your Income
When you’re working to defeat your overbearing credit card bills, the first step is to fully budget your money. Yeah, yeah, you’ve probably heard that before. Maybe you’re already operating with a budget of some kind. But are you truly budgeting all of your money?
The difference here is that you want to have a destination for every single dollar that finds its way into your checking account. No, this doesn’t mean you should be spending all of it. Quite the opposite is true actually: You should attempt to save and pay down debt as much as possible if you’re struggling with credit card bills. Here’s what to do:
- Gather all of your financial statements, including bills, bank accounts, or anything that has to do with your money or expenses.
- Once you have all your financial information together, it’s time to look at how your income compares to your expenses. If you’re continually having problems with credit card bills, it could well be that you’re spending more each month than you’re making.
- Look for ways to minimize your costs. Start by eliminating enough non-essential items so that you can at least bring your expenses into parity with your income.
- Budgeting every dollar of your income allows you to do a better job of controlling your spending. If you have excess, automatically dedicate some of it to saving and debt repayment. Doing this instead of just keeping it in your checking account will push you toward a much stronger financial footing.
Budgeting isn’t just important to keep your finances in good shape. It can help you get to a better state of mind, as it can alleviate much of the stress that comes with ongoing money problems—particularly credit card bills.
Consider Credit Card Balance Transfers
Consumers who are really struggling with their credit card bills might benefit from a balance transfer. This is where you take the balance from your credit cards and move them onto a new account with a low introductory interest rate. The idea is that you can then pay down your bills more effectively because you won’t be accumulating interest for that beginning period—typically around 18 months. This is a form of debt consolidation solutions you can do on your own.
While credit card balance transfers can work wonders for some, there are also some things you need to be aware of before signing up for anything. For starters, you need to read the fine print. There are typically fees associated with transferring balances. If the fee is high enough, it can negate any benefit you might have gotten from the saved interest expenses. Furthermore, you need to make your payments after transferring a credit card balance. If you don’t pay, it can negate the terms of your introductory agreement, which can land you with an even higher interest rate than before.
Talk with a Credit Counseling Service or Debt Relief Agency
If you’re unable to solve your credit card bill issues on your own, it’s probably time to call in some help. Credit counseling services are typically a great place to start. They offer some free resources, and can even set you up with a debt management plan (DMP). However, credit counseling won’t be enough for everyone who’s deep in credit card debt.
For some consumers, working with a debt relief agency might end up being the only viable option. It’s important to find a reputable organization that has good reviews and is accredited by national standards. There are certainly legitimate debt relief companies out there, but many only exist to make money from people’s hardship. Taking the extra time to ensure you’re working with a good agency will make all the difference.
Getting out of credit card debt is hard, especially when you’ve got a lot of it. There are, however, routes you can take to defeat your credit card bills. It might not be easy; but it will certainly be worthwhile.
