Did you know that the average Canadian spends $2,205 per month on their credit card? If you think you’re alone in managing the credit card debt you’ve racked up, think again. No matter what the reason for your debt, having that financial difficulty can be extremely daunting.
Unless you’re lucky enough to receive a windfall of cash, getting out of debt can be a long and tedious process. However, there are some things you can do to pay off your debt in a quicker and more manageable way. Take a look at some of these simple tips on how to get rid of credit card debt.
Debt Avalanche
You may have heard of this term before but haven’t used it where your debt is concerned. To use the avalanche method, you should compile a list of your debts starting from the lowest interest rate to the highest. You should pay the minimum amount due on your lowest interest debts and put any spare money towards your highest interest rate debt.
The quicker you can pay off the debt with the highest interest rate, the more disposable money you’ll have each month to tackle your other debts. Continue using this method until you’re completely free of debt.
Debt Snowball
Using the snowball method is the opposite of the avalanche method. This way you should tackle your smallest debts before the biggest ones. It can be much easier to do this and people often find motivation in paying off debt quickly and then moving on to the next one.
Once you’ve paid off each debt, the money you have left over each month should go towards the remaining debt so you can increase your minimum payment on each one.
Balance Transfer
Depending on your credit rating, it may be possible to transfer the balance of your credit card to a 0 percent APR card. These cards offer an introductory APR for a fixed period. It’s usually between 12 and 24 months.
This will give you time to consolidate credit card debt without incurring any further interest as long as you don’t make any further purchases. If you can pay more than the minimum amount each month, you may be able to clear your debt by the time your fixed APR period is over.
Personal Loan
You could get a personal loan that offers a lower amount of interest than you’re currently paying. Personal loans can be used to pay off credit cards and give you a chance to pay a more manageable amount. If your minimum payment is lower on a loan than on your credit card, you may be able to pay off more each month and clear your debt quicker.
Even if you have a lot of debt, it’s worth checking what type of loans you’re suitable for. Many people assume they won’t be accepted for loans because they have debt but as long as you’ve been keeping up with minimum payments, you could be accepted for a personal loan that suits your needs.
Stop Spending
If you’re finding that your debt is getting out of control, it’s time to make some lifestyle changes. Living beyond your means will only lead to financial difficulty. To get your debt under control it’s essential to evaluate your spending habits.
If you want to lower your debt, you’ll need to start making more than the minimum payments. To do that you’ll need to save more money each month. Try buying fewer treats for yourself, cooking at home instead of eating out, and canceling subscriptions like Amazon or Netflix.
Plan For Expenses
Many people end up using their credit cards to pay for expenses that aren’t regular. For instance, rent is a regular payment so it’s paid on time but buying a wedding gift for a family member is an irregular expense so it’s not planned for. If these types of irregular purchases are why you’re in debt, it’s time to plan.
Life is full of unexpected costs so it’s a good idea to set up a fund so you’re prepared. This rainy day fund could cover anything from fixing your car to paying for Christmas gifts. Just adding 10% of your wages to a savings account could mean you’re spending far less on your credit card and therefore you aren’t paying interest on irregular purchases.
Switch to Cash
When you constantly have your credit card with you, it’s tempting to use it. If you want to clamp down on reducing your debt, either get in the habit of using cash instead of or cut your credit card up. It’s not always easy to do since most people carry their credit cards for emergencies.
However, very few people only use their cards for emergencies. If you start using cash instead of cards for your purchases, the habit starts to become psychological. You’ll begin to see a clear separation between the money you can use and the money you shouldn’t use.
Find a Loan to Suit You
If you need a personal loan to cover your credit card cost, Loanz is the ideal place to look. With instant approval on personal loans up to $15,000 you could get the peace of mind you’re searching for today. The application is quick and easy and you could receive your funds within 15 minutes.
Take Care of Your Credit Card Debt
Credit card debt can haunt you and there’s nothing worse than burying your head in the sand. Take control of your debt and clear it once and for all with quick and manageable payments. Why not find out how it works and apply for your loan today?
