Reduce Your Credit Card Debt To Zero
Even though you may not like your credit card debt, credit card companies love it.
Credit card companies make lots and lots of money on your credit card debt. The interest you pay on your debt is what keeps credit card companies in business. That’s good for them, but bad for you. Debt can be paralyzing. Some debt is okay, but debt piled on to the point that it strangles you is bad news. Now do not despair if you feel as if your debt is crippling you. There are things you can do to reduce your debt to zero. Wouldn’t it be nice to have absolutely no credit card debt? You can, you know. You may not like the changes you have to make to drop your debt to zero, but if you are truly tired of your credit card debt you should at least try to make these changes. The best approach is to change little by little. Most folks do not stick with making changes if they try to do it all at one time; so approach slowly.
Steps To Credit Card Debt Reduction
Step #1 – Go On A Spending Diet
The first step to reducing debt is to stop accumulating it. The way to do that is to put yourself on a spending diet. For one month try to only buy what you need. If you do not need an item and it is simply a want purchase, skip it. If you are shopping to blow off some emotions, skip the purchase, just window shop. Compare this spending diet to losing a few pounds. If you wanted to lose a few pounds to fit into a new outfit you would be more inclined to skip a second helping of mashed potatoes, right. Well the same idea applies to a spending diet. If you want to reduce your credit card debt, skip the second helping of purchases.
Step #2 – Cash It
If you need to use your credit card to buy something, you cannot afford it. Try convincing yourself of that one, right. It can work though. If you use cash to make all of your purchases, watch, you will spend less. So for a week, leave your credit cards at home and see how that changes what you can buy with the cash in your pocket. It will limit, thus reduce, how much you buy. That is not a bad thing. Reducing your spending is the key to reducing your credit card debt.
Step #3 – Budget It
Budget’s sound so old-fashioned but they do work. If you can learn to not spend beyond your budget you will be living within your means. And that’s a great place to be. There are numerous budget apps available to help you keep your spending in line. If you prefer not to use an app, just do it with pencil and paper. Start by writing down every single dollar you spend. Then divide that into need and want purchases. Review areas where you can cut back. And then make the adjustments. This will take some time to come to gripes with because we all think that everything we buy is a need, but it really isn’t.
Let’s take a moment to define a need vs a want. Food, clothing and shelter would be considered needs. Those needs turn into wants when we grab coffee on the way to work because it tastes better than the coffee we make at home. A need for clothing becomes a want when we have to have the most expensive shoes, handbag or smart-phone.
Step #4 – Cut The Card Or Ice It
It is so easy to use credit cards. We feel justified with our purchases and are not mortified for 30 days or so until the credit card bill arrives. Then the guilt sets in or even worse the lack of funds to pay. If you cannot resist using that plastic little credit card in your wallet, get rid of it. You can either shred it or put it in the freezer until you regain your self-control. The logic behind the freezer is that it takes a while for your credit card to thaw during which time you should be able to reverse your desire to use it.
Step #5 – Avoid All Contact
Buying on the internet is so easy now-a-days. You do not feel the financial impact until you receive your credit card statement 30 days later. The absolute most effective way to reduce your credit card debt to zero is to avoid all contact with internet purchases. Easier said than done. But if you can conquer buying on the internet, you will be amazed at how much you will reduce your credit card debt.
You Can Do It
If at first you stumble and find yourself making the same old credit card mistakes, that’s okay. Give yourself a break. Get back up, dust yourself off and try again. Even if you just accomplish one of the five steps, you should congratulate yourself. Try the step you find the easiest, accomplish it, then pick another one. You will be helping yourself financially in ways you can not imagine. And you will stop supporting the credit card companies by overusing your credit cards. Put yourself on a spending diet, use cash only, follow a budget, cut up your credit card and stop buying from the internet. Good luck.