It’s the holiday season, so everyone is building a Christmas list and checking it twice before heading to the stores or online to swipe that credit card.
However, a month from now, when those holiday bills are due, it can have you feeling hungover about the holiday season. Don’t worry too much because BLACK ENTERPRISE has you covered with its list of strategies for wiping out that credit card debt.
1) Evaluating Your Finances
Before you can pay off your credit card debt, you must first find out how much you owe and how much you can pay off monthly while still living. That means creating a list of how much debt you owe on each credit card, each card’s annual percentage rate (APR), and your other monthly bills.
The next step is comparing your debt and expenses (groceries, rent, utilities, etc.) with your income and working out a monthly amount to pay off each month. After that, it’s time to prioritize your spending, set a budget, and stick to it.
2) Tackling The Debt
Now it’s time to begin paying off the debt. Some people may want to tackle the biggest debts first to save some money on the back end, while others may want to take care of the smallest debts first to use positive reinforcement to get to the end.
Either way, find what’s your most comfortable with. Credit Karma has a debt calculator that can help. Simply enter the balance you owe, the interest rate, and your expected monthly payment or desired payoff time frame to determine how long it will take to eliminate the debt. You can also automate the payments, so the payments are made even if you forget.
Another step is paying more than the minimum balance if you have the money. This will help you eliminate the debt faster, and your card company is required to chart this out on your statement giving you an idea of how effective it is.
3) Debt Consolidation
One of the biggest issues with credit card debt is the high-interest rates. According to MoneyGeek, the average credit card interest rate is 19.49%.
If you have good credit, consolidating your debt into one account is a way to make one payment each month to wipe away the debt. Replacing your credit card debt with a credit card consolidation loan, also known as a debt consolidation loan or a personal loan.
That will allow you to pay off your credit card balance with a new loan for the same amount but at a lower interest rate than 19%.
4) Work With Your Creditors
It may be hard to do, but admitting your financial situation to a credit card issuer may help you negotiate payment terms and qualify you for a hardship program, especially if you’ve been a longtime customer with a good track record.
With interest rates climbing and the threat of a looming recession growing every day, credit card companies are more likely to work with their customers to pay off their debts. Something as simple as swallowing your pride and answering your phone can lead to significant savings and the end of those annoying phone calls.
5) Additional Financial Advice
If you need additional financial advice, including estate planning, 401(k)s, saving for retirement, and entrepreneurship, BLACK ENTERPRISE has a wealth of podcasts, articles, and discussions on these topics with the leading Black businessmen and women in the U.S. who share their knowledge and experience that can inspire you.
