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In today’s day and age, debt is something all too familiar for Americans. According to Consumer Reports; “8 out of 10 households average credit card debt is roughly $7,000.” And that’s just credit card debt; that doesn’t include your mortgage, auto loan, or college tuition.
Unfortunately for so many of us, we don’t realize the numerous benefits that our credit cards can offer, when used appropriately. Benefits including – cash back and travel points. Instead of focusing on the debt that is piling up, try to focus on how you can eliminate some of the debt by following a few simple tips so you can begin having a ‘healthy’ relationship with your credit card again.
Transfer It: Right now, there are several credit cards out there that have $0 balance transfer fees and 0% APR for almost 2 years. Now here’s the trick; when you transfer your balance from one credit card to another, you’re getting another credit card. So, that doesn’t mean you have more money to spend at your favorite store. The purpose of transferring your existing debt from one card to another is to elude the interest bestowed upon you from the first card which will give you the opportunity to pay off your existing debt.
Stop Swiping: If you’re in the ‘way-over-your-head’ kind of debt, then you should stop using your credit cards all together. I know… easier said than done. But it’s a long, never-ending cycle if you don’t set those boundaries for yourself. Try to strictly stick with only using cash/debit and only relying on your credit card for small purchases that you can pay-off right away or emergencies. More importantly, if your only way of making purchases is by credit card payment, then you should stop reading and call me now!
Get Back on Track: Debt eats at us, but you can manage it better by getting back on a budget. Sitting down and creating a budget will allow you to create an action plan to better your financial situation and ultimately give you the peace-of-mind you need and so deserve. There are so many budgeting platforms available out there that truly makes it easier than ever before to stick to your budget.
Don’t Cut It: Some people might advise you to cut up the credit card and throw it away. Now, in a drastic scenario involving someone that may be addicted to swiping, this may be their only option. Otherwise, not using your credit card can actually hurt your credit score. After you’ve made the necessary steps to transfer your existing balance to a card offering 0% interest, make a couple purchases – but just don’t go overboard.
Leave It Alone: I’m talking about your retirement savings. One of the worst things that someone can do who is in debt is start digging into their retirement savings accounts. This may help you out very briefly right now but what kind of position do you think you’ll be in the long-run? Try a few other tips/steps before making this drastic decision.
Getting out of debt can be quite simple, you just need a plan and a little bit of patience. Take the time to sit down, look at what you’re spending your money on and why. Know the options you have out there and don’t be afraid to ask questions. If you’ve found that you’ve slipped off the path and need some help and guidance, then give me a call!