According to CNBC, almost 50% of Americans are carrying credit card balances, and nearly ¼ have incurred additional credit card debt as a result of the COVID-19 pandemic. Getting rid of card debt may seem overwhelming, but we’ve got a five-step plan to help!
Assess your whole financial situation.
Make a list of everything you owe, including monthly bills and credit card balances. Make sure to include the annual percentage rate (APR) for each card you have. Then, compare expenses with income.
Prioritize your spending.
Cover the essentials first, such as food, housing, and clothing. Next, pay the minimum amount on all secured debts, like your home and car loans. Then, start working on paying down credit card debt with useful tools like financial calculators. Make sure to use cash or debit cards only to pay for essentials, so you don’t increase your credit card balance. Above all else, pay at least the minimum balance on all outstanding debt to avoid additional fees.
Establish a budget.
Once you have prioritized your debt, develop a budget to track spending. These budgeting sheets will get you started. Try to adhere strictly to your newly established budget.
Secure a better rate.
If you have multiple, high-interest rate accounts, look for a new card with little to no balance transfer fee and a lower rate than what you currently have, and consolidate all your debt into one account. Our Great Rate Visa Credit Card offers an introductory rate of 1.99% APR*for 12 months with a $0 balance transfer fee. Shaving off even a percent or two could save you hundreds of dollars while repaying your debt.
Keep your eye on the prize! Getting rid of credit card debt can open the door for you to afford a new car, a dream vacation, starting a new home renovation project, or a hefty down payment on a new house. Write down your goals and keep them displayed as a visual reminder. When tempted to overspend, take a peek at them for a big picture reminder.
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