When we get our first credit card, we all tell ourselves we’ll be sensible and responsible with and not get ourselves into any unnecessary debt. Soon, the notion that you can have what you want, and you can have it now takes over your better judgement and before you know it, you’re maxed out and feeling ripped off by interest rates and charges.
It’s probably part and parcel of getting our first credit card and something everyone has to go through to really learn about debt and credit cards. If you catch yourself early, that’s after you’ve maxed out your first credit card and no more, digging yourself out of credit debt can be a valuable lesson.
Whether you’ve hit your maximum or are close to it, here are some top tips on paying off your credit card balance faster:
Pay debt or save?
The money you’re pouring into your savings account is earning much less interest than your credit card debt is incurring. Many people wonder if they should pour their savings in their credit cards and be left with nothing for a rainy day. The smart thing to do would be to divert your savings and money you plan to put into your savings account each month into your credit card. If you’re really strapped for funds on a rainy day — use your credit card. Your focus is to knock off that high interest debt first.
Sell your things
If your credit card debt is a result of shopping and buying expensive items, the right thing to do is sell them and put the money towards your credit card. It’s really tough and you may argue the item has depreciated in value and you won’t get the full amount back. Still, it’s a really good lesson in distinguishing what you can and can’t afford plus give you more money to repay your credit card debt faster.
Earn more money
The only way to knock off that debt is to pour more money, and as much as you can into it. If you’re struggling to keep up with the minimum payments with your pay cheque, it’s time to moonlight for a part-time job. It could be anything from giving tuition on the weekends to offering your expertise as freelancer in your field and spending your Saturdays working. It’s not forever, just until you finish paying your credit card off and you might have some fun and make some new contacts along the way.
Stop using it
Cutting your card up may be extreme as you might need it in case of an emergency and especially if you’ve poured your savings into it and are left with nothing for a rainy day. So freeze in a big cube of ice and leave it in the freezer. Sounds silly, but it works.
Do you have any strategies you use to tackle your credit card debt?
Tell us below!