6 Steps to Lower Your Credit Card Debt!

By Lynx Financials
Credit Card Debt, 6 Steps to Lower Your Credit Card Debt!, Lynx Financials, LLC

This year has been a roller coaster economically for the world. It has shown us that we need to be prepared for anything. Unfortunately, debt is something in reality to worry about as well. With unemployment at it’s highest it’s been in decades, it forces a rising amount of citizens to use their credit cards with hopes of getting by until the next check arrives.

Credit card debt is among the most popular of the dues, as it gives consumers the misconception of larger bank accounts. Here are some tips on how to manage it better.

How to Manage Your Debt

  1. There are a lot of tools out there that can help you check your credit score.
  2. Compile all of your debt onto one spreadsheet with company the debt is owed to next to it. Be sure to write down APR rates as well as due dates.
  3. Use this spreadsheet to start paying your bills on time. If you can afford to make extra payments to the cards, do this instead of saving, as the APR rates will make the payments get higher each month. This is the simplest and most effective way to eliminate credit card debt.
  4. Prioritize what debts to pay off first.
    1. Credit Card Debt is the most favorable to pay down first. You want to look at all the credit cards that have debt on them and prioritize by the highest APR rate. That’s how you know which ones to pay down first.
    2. Pay off Collections and Charge-Offs – These stay on your credit report as long as there is money owed. Paying these off are the next priority.
  5. Once all or most your debt is paid off, you should start saving to have some emergency funds lying around. Emergencies happen every day and it helps to have some extra funds to help cover them instead of putting them on your credit card.
  6. You also want to start budgeting our your payments, as well as your free spend money. This is a very important task to implement in your life as will help you use your cards only for the amount that you can afford to pay off on time.

Remember that managing your debt is an ongoing event, and only gets harder once you get married, decide to buy a home, start a family and move forward with life. Being organized and on time with your payments is crucial. If you don’t think you can afford something up front, then don’t pay for it on a card. This is how debt starts racking up. If you choose to finance something, make sure to set up an auto pay in order to avoid late payments.

If you put the time and energy into it, you can also work with your providers to work out payment plans with lower interest rates instead of paying a lump sum or higher amounts each month. This will also help you spread your payments across multiple different accounts.

Reasons for an Effective Debt Management Strategy

Debt can cause people stress in many different aspects of life. Banks will look at how much debt you have when opening an account with them, or asking for a loan. Often, they will reject the application based off how much debt you currently have, as they are weary of a delinquent payback from the consumer. It can also affect your credit majorly, which can prevent you from getting approved for any finances or loans you may need. It is also very hard to get approved for credit cards if you have high debt and low credit.

You can read more about your credit here. There are tools out there to fix your credit, which are very easy to accomplish yourself. Read more about reasons for fixing your credit and educate yourself on the uses good credit can bring to you.

Take the first step…

If you have more than $10,000 in credit card debt, there are companies that will help you come up with a debt management strategy in order to pay your debt down faster and help you budget. They can help you come up with a game plan, and also help negotiate rates with the vendors for you to speed up the process.