A lot of people want to know how to get rid of their credit card balances. Several statistics also prove that the search for solutions to eliminate your credit card debt is on the rise.
Debt represents a management challenge for a large majority of individuals. Indeed, the excessive use of credit cards can lead to serious problems. However, behind every problem is a solution.
5 steps to know how to eliminate your credit card balance
The first thing we can advise you to do to take control of your finances is to act as soon as possible. To get rid of all your credit card balances as quickly and cost effectively as possible, follow these steps:
Make a list of all your credit cards
A list of all of your credit cards will help you understand in detail what you owe. On a sheet of paper, please write the following:
- the balance of all your credit cards;
- interest rate for each;
- minimum percentage of overdue payment;
- the minimum monthly payment based on your latest statements for each card.
Number your debts
Rearrange the list so that the credit card with the highest interest rate is at the top of the list. Indeed, it will be interesting to pay off the credit cards that cost you the most in terms of interest as quickly as possible. For example, it would be wiser to eliminate as quickly as possible a debt with an interest rate of 18% compared to that at 0%.
Know the total minimum payment
Add up the minimum payment required for all cards. By adding up the minimum monthly payment for all of your cards, you will have in mind that if you have less than this amount per month, you will not be able to cope with the situation on your own. We invite you to schedule a free consultation at the Clinique Liberté in order to have your financial situation analyzed by a professional.
Take stock of your financial situation
When you have made the statement of your financial situation, you will be able to know your possible savings. Then you can decide how much money you have left each month. This practice will help you pay off your credit cards faster, as you will be able to pay more than the amount requested by your statement.
Create a budget to eliminate your credit card balance
If you think you can’t afford the extra amounts on top of the minimum payment, it’s time to budget and find ways to cut back on your expenses. Are there any expenses that you can share? For example, do you go several times a week for coffee rather than having it at home? If so, at the end of the week you will have saved at least $ 20 and at the end of the month almost $ 80. Think about all your expenses and inevitably, you will find a way to reduce them. Reducing your spending will go a long way in helping you pay off your credit cards faster.