Given that nearly 80% of all Americans are in some kind of debt, it’s important to know that you’re not alone. However, there are some clever and unexpected steps to getting rid of credit card debt that not everyone takes advantage of. If you pursue another path to getting through debt, you could be living your best life sooner than you’d think.
Here are five ways to wriggle free from debt.
1. Look At Your Status Realistically
If you want to tackle your credit card debt, you need to have a better understanding of where you stand and what kind of work you can do. You can’t get rid of all of your debt if you don’t fully triage your financial status.
If you owe $10,000 but only make about $40,000 a year, it’s going to be hard to give up a full 25% of your income every month. You also need to know more realistically how much you owe. Some people undervalue their debt based on how much it’ll cost them by the time they’re ready to fully pay it off.
If you don’t know what your real target number is, your denial or lack of knowledge is going to keep you from ever paying off your debt. You need to know your debt and the current interest rate if you want to accurately pay it off for good. Otherwise, you’ll be perpetually behind on how much you need to be paying.
2. Change Your Rate
The best way to get a handle on how much you owe is to negotiate a lower interest rate than what you’re currently paying. Just lowering your rate by one or two percentage points could lead you to save hundreds while you pay everything off. If you’re able to save while you pay off debt, you’ll pay it all off faster and be much more satisfied with the results.
Just a quick phone call to your credit card company could help get the ball rolling. Your credit score is going to be the biggest factor in determining how much you can lower your interest rate, but it’s not all that matters. Having a solid history of paying off your bill on time is going to make a big difference.
While not every single credit card company is going to allow you to do this, some are more willing to try it than others.
Call up every card company you owe and ask about lower rates. If you can, make a note of your new interest rates and start calculating how you’ll pay off your debt with those new figures.
3. Schedule Your Costs
If you’re trying to manage the costs you’ll incur while paying off your debt, you need to fairly assess your current income and expenses. You need to make a comprehensive list of how much money you have each week in order to get on a schedule of paying off your debts on time. This is going to be your bible for figuring out how to pay off your debt.
Go through your weekly expenses like lunches, transit, gas, and any scheduled payments. Then list all of your monthly expenses like rent or your mortgage, insurance, car payments, your phone, gym membership, and anything else. You need to be thorough if you want to come up with a realistic number.
While it might be a pain, go through a year of your credit card bills to see where you could be wasting some of your resources. When you keep better track of your spending, you’ll be less likely to spend money on things you don’t need. A small notebook or a financial app on your phone can help you keep track while you’re on the go.
4. Set Concrete Goals
While setting the goal of “paying off your debts” is an important overall goal, it’s not going to get you where you need to go on a daily basis. You need concrete daily goals to stay on top of your spending. The best way to do this is to break things down over the course of a year.
You need to take your pay off strategy one week at a time. Even if you’re paying off on a monthly basis, when you break things down week by week, it’s much easier to watch where your money goes and make sure your spending doesn’t get out of hand.
If possible, start off by transferring the balance from your current cards to another card. Check out the best credit cards around before you make this decision.
5. Look For Support
Believe it or not, there are lots of online forums to help you get support in paying off debts. The anonymity of online forums allows people to be more honest.
You’ll find people sharing their tips, offering support, and giving you the motivation of kind words when you get stuck.
A community where you can swap stories doesn’t have to be anonymous and online. There are debt-based social groups through community centers and religious organizations. They’ll meet on a weekly basis to work together and share words from their favorite gurus of getting out of debt.
When you’re frustrated, take out your notebook and write about your feelings. The better you can understand your feelings, the easier it’ll be to get through your problems.
Getting Rid of Credit Card Debt is Hard
Give that so many people are living under the weight of it, it’s clear that getting rid of credit card debt is a challenge. You shouldn’t feel bad if you’re struggling to get free of debt and get on with your life. You’re not the only one and you need to talk openly with the people in your life if you ever want to break out of debt.
If you’re in debt over your business, check out our guide to figure out whether or not you need to pursue fast capital.