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Hey Everyone! Today I have a great guest post to share with you all.
Patty runs WorkingMotherLife.com – a site focused on figuring out the tough balance of working and being a single mother. You can also find her on Twitter @WorkMomLife.
Credit card debt can be pretty overwhelming.
If you find it difficult to stay on top of your payments each month, or if it just seems like you will never see the light at the end of the tunnel, you are not alone!
This is especially true for people in unique situations where their finances are tight and they rely on credit cards to get them from one month to the next. Single mothers, college students, and people working for minimum wage may find themselves in this type of situation.
The good news is that beating credit card is possible, but you just have to know the right way to do it.
Here are some tips that helped me when I overcame my credit card debt:
#1 – Make More Than the Minimum Payment
Paying that balance in full every month isn’t always possible, although it is the best way to ensure that you don’t pay too much in interest. If you are in a sticky situation, paying even just the minimum payment can be difficult. Whenever you have the chance, make more than just the minimum payment.
The truth is that most of the time the minimum payment will only cover the interest rates, and you could literally pay forever towards your card and still not pay it completely down. Making a larger payment than is required can really help to get you out from under that debt.
#2 – Negotiate Better Interest Rates if Possible
A lot of what you pay towards your credit card bill is interest, so having a better interest rate is definitely going to offer some benefits. The lower your rate is, the better chance you have of being able to pay down the card faster.
The problem is that not all cards offer the opportunity to lower your rates. Talk to your credit card company and see if they will negotiate a better rate with you. If not, it may be time to look into other options that may be available to you.
#3 – Avoid Charging More Debt to the Cards
When you are trying to get out from under credit card debt, it is not a good idea for you to charge more debt to the cards. You pay a little off, then charge it back up. This is a mistake that many people make when it comes to credit cards.
While there are times when charging something to a credit card is necessary, it should not be abused and overused. The less you add to your debt as you are paying it off, the faster you will be able to get it paid off.
#4 – Consider a Personal Loan with a Better Rate
If you are unable to negotiate a better rate with your credit card company, it may be a good idea to consider a personal loan. Personal loans often have better rates than credit cards, and the loan can be used to pay down credit card debt and make it easier for you to make a single payment towards your personal loan each month.
This is especially true for those that have credit card debt spread out among multiple credit cards. If you have decent credit history, then you may lock in a good rate that will make it easier for you to stay on top of your payments and get yourself out of debt even faster.
#5 – Utilize Balance Transfer Perks with a New Credit Card
Another great option that helps many people get away from their monstrous pile of credit card debt is to apply for a new credit card that offers a 0% introductory rate on balance transfers. This is a really great idea for those with a higher interest rate.
If you can move some of those balances over to a new card that won’t charge interest on the balance transfers for an introductory period, then it gives you time to pay them down some without having interest applied. Many cards offer these introductory periods for six months, while others may offer it for even longer up to 12-18 months.
While overcoming credit card debt is not easy, it is very rewarding to come out ahead on the other side. Instead of feeling hopelessly burdened by that debt, use these tips that we covered to help you pay down those balances and start seeing the light at the end of the tunnel a little more clearly.