3 Key Strategies To Get Rid Of Credit Card Debt



Are you having too much debt? Unless you are forced to pay off something unavoidable such as unexpected medical bills or repairing cost of some unexpected accidents (car, house and etc), chances are that you can find room in your daily living to help fix or improve your debt issue. Even if you are forced to take on unexpected debt, there are many ways to restructure your debt so that you pay less interest expenses and paid off the debt quicker.

There are different types of debt. Credit card debt is most likely the worst kind unless you go for the loan shark. Also, credit card debt is the most cunning kind because you accumulate the debt by many smaller transactions that appear to be “costles” transaction. And it easy to miss a payment whether you are miss it intentionally, unintentionally or even subconsciously avoiding the pain of payment. Credit card’s interest rate is probably one of the highest legally allowed.  The other debts such as mortgage carry much lower interest rate. That’s why by restructure your debt from one type to other type, you can reduce your monthly interest or admin charges.

Whatever you do, bear in mind that clearing your debt is a long term project! It takes commitment and persistent work to execute it. It requires you to earn more and spend less. For most this is a challenging game as it requires a strong and discipline mindset.

The most important thing in your plan to get rid of your debt is reducing interest expense. Interest is generated over time. So you are in competition with time. Therefore the key to pay off your debt is to reduce interest expenses by paying off AS EARLY AS POSSIBLE.

Key 1 Reduce the interest rate!

Obviously the interest rate is a key element in your debt. You should review how many types of debt you have and their associated interest rates. The first thing you can do right away without hard work is to use the low interest rate credit to pay off the high increat rate debt. In a nutshell, if you have room in your personal line of credit with the bank that charges 4% interest rate, you will rather borrow against this line of credit to pay off your credit card debt which may charge more than 10%. Even if you use a credit card to pay off another credit card, it may earn you 30 days extra time to save more money to pay off the interest. Once you are out of the rate race of missing payment deadline, you embark on a positive path.

Key 2 Save more and spend less!

The most realistic strategy to get rid of your debt is to saving more money by spending less. Of course we can look for additional income by taking on a part time job. However, when it come to debt, it’s a speed competition against interest expense accumulation. The earlier you pay off the installment, the less interest expense we get. If you miss a payment chances are that there are all kind of admin fee charges. Finding a job, working on it, waiting for the pay check all takes time. However, spending less is something you can do right away so the time advantage is on your side.

Also, if your debt problem is credit card, chances are that you get into this situation by spending more than you can afford. Managing yourself to spend less will resolve your problem at the root level and will also install a new positive spending habit for long term.

Thus you should develop your own savings plan by review your spending habits to look for way to spend less, hopefully, with lesser impact to your lifestyle.

Key 3 Earn more money!

This is an obvious strategy that is easier said than done. However, still, you should look for rooms for part time jobs, turning your habits into a cash generation machine or many other incomes. What I like to say is that it takes hard work and stamina to go for the extra miles to earn an extra bucks. The challenge is whether you have the stamina or not. To help you to sustain the tough work, mental game is important. You need to motivate yourself by making the hard work less painful. If you happen to like painting, then turn it into a training service or tutoring service. Or simply sell your painting online or in your garage sales! The key is look for ways that you feel more comfortable so you can turn a long battle into a joyful journey. Actually if you have spare time at home “worry” about debt, it’s actually better for you to work on something so to steer you away from the worry. It’s actually healthier to work harder than to sit at home worrying!