How to Get Out of Credit Card Debt Fast
It didn’t take you long to get into credit card debt.
A dinner out here, a shopping spree there, your favorite daily latte and that vacation last month put you into a critical financial situation faster than you expected. Paying the minimum on your balance each month may be keeping you afloat, but it’s most certainly not a strategy on how to get out of credit card debt fast. Making the minimum payment on your credit cards will only add interest to your balances and in some cases late fees if you are unable to pay the bill at all. It’s a vicious cycle, and the ramifications can be extremely detrimental to your financial future. So now what do you do?
Whatever your definition of “fast” may be, the time it’s going to take for you to get out of credit card debt might not be as quickly as you hoped as it depends on your unique situation. There’s no way to sugarcoat it; you will have to make sacrifices, have patience, nix some bad financial habits and stop procrastinating stat!
Here are some tips on how to get out of credit card debt fast and the habits you should adopt to get you back on track quickly.
Create a Budget
If you are a financial procrastinator, creating a budget may be hard for you to get started, but stop what you are doing right now, and get to it! The longer you wait on getting your budget in order the longer it will take for you to get out of credit card debt. Your budget should show how much you receive from every source of income that you generate each month from your steady job and side hustles as well as any child support or other income. List all of your expenses in detail. It’s important to include everything you spend your money on right down to your daily coffee or lunch expenses. By listing everything you spend your money on each month, you will be able to see where you can make cuts.
For example, if you spend $10 each day on lunch for five days each week, that’s $200 per month. So, create a habit of packing your lunch instead of buying and put that $200 towards your credit card bills. Discretionary expenses are the easiest expense to manage. Foregoing a trip to your favorite coffee shop each morning might sting a little, but it will play a great role as you begin your new financial journey and learn how to get out of credit card debt fast. Once you pay off your credit cards, you can add those discretionary and fun things back into your life later on as long as it fits into your budget.
Negotiate with Your Credit Card Companies
The task of negotiation may take some time, patience and a little bit of homework on your part, but when negotiating a lower interest rate, you need to have as much ammunition as possible. First, before you call, know what other credit card companies are offering you. If there is another credit card company that has a lower interest rate on the table, use it as a bargaining chip.
Let your credit card company know how long you have been with them as loyalty is a great negotiating factor and they most likely won’t want to lose you as a customer. If the representative you are speaking to won’t budge on the interest rate, it’s very important to remain polite and ask for a manager. If you are still told no, don’t give up. Persistence can pay off if you spread out your calls over the course of a few months leading you closer to get out of credit card debt fast.
Which Cards Should You Pay Off First?
It’s always recommended to pay off high-interest credit cards first, as it will save you the most money in the long run. However, if your goal isn’t necessarily to save more money right now and you want to knock off credit card balances quickly, you can start with your lowest balances first. For example, if you have a store credit card balance of $200, you can pay that off just by brown bagging your lunch for a month as mentioned above. Getting rid of a few small balances when you first begin to pay down your credit card debt will help you feel a sense of accomplishment and keep you motivated to continue to stay within your budget. You’ll feel confident about tackling the larger credit card balances, and on your way to get out of credit card debt fast.
If you are feeling overwhelmed by your credit card debt and need help with getting back on track, contact Tayne Law Group, P.C. Our debt relief attorneys can guide you through the process of eliminating credit card debt so you can have a financially healthy and secure future.