Let go of Credit Card Guilt and
Get out of Debt… Again
Credit cards are evil. We all know how easy it is to overspend by using a credit card. So why do we do it? They are convenience, quick and easy to use. In an ideal world we would all cut up our credit cards and go strictly to cash and never look back. But lets be honest, not a lot of people really do that. I am guilty of this myself. Our intentions are good. We paid off the card however slowly but surly charges creep back on it… a vacation here.. grocery’s in a pinch. It is way too easy to fall back into old patterns. So if this is you and you have a balance on a card that once was a big fat zero. Stop wasting time feeling guilty and start working towards a solution. Here are some things you can do to get a hold of your financials and get rid of that credit card balance.
- Get rid of the high APR and move your balance to zero percent-There are a few caveats with this method to keep in mind. Be sure that you can pay off the balance before your promotional rate expires. Also, DO NOT PUT PURCHASES on this card. In the fine print of the credit card agreement it will tell you how your payment is applied. It will go first to purchases and last to balance transfers. What this means is if you make purchases your payments will go to those purchases first, leaving the balance transfer amount revolving until the promotional rate expires. This totally defeats the purpose of transferring. The remaining balance will bump up to a a signifigantly higher rate, sometimes as high as 29%. The upside is if you stay consistent, you can pay off your transfer balance much quicker at the zero APR and can get rid of the debt.
- Don’t get sucked in by points programs – If you are someone who revolve a balance on your credit cards do not fall for a point program. It is way to easy to overspend in the name of points and easily create a growing debt monster.
- Follow up with auto billers – If you sign up for a monthly subscription service, or reoccurring monthly charge keep in mind you are giving these companies a preexisting authorization to continue to bill you each month. Many of them continue to take advantage of this authorization even after you have canceled there service. Gym memberships where notorious for using this pre authorization to continue to bill in the hopes that the cardholder wouldn’t notice. Most of the time they didn’t. Make sure you cancel these auto-biller or arrange for different payment and follow-up to make sure they are no longer charging your card.
- Review your statement -I know it sounds simple but just like the example above illustrates if you do not keep track of your money it is easy for someone to it their money. If you see a strange charge that you can not identify and you are unable to determine the merchant follow the dispute procedure outlined on the back of your credit card statement.
- Follow Dave Ramsey’s Debt Snowball -You don’t have to be a Dave Ramsey acolyte but his plan works. Pay off credit cards with the smallest balance first, making only the minimum payments on all other cards. Once you pay off that card move on and put all of your money to the next and so on. The key is that you are building motivation and momentum to get rid of your credit card debt by tackling one card at a time. (See the video below)
Don’t doubt Dave…his plan works. It is us that get back into debt after we work so hard to pay it off. I’m here to tell you if you have paid off debt and used the credit cards again let go of the guilt. Learn from your mistakes and get to work. You did it once you can do it again.
We think we will have the self control to resist the pull of the credit cards but as long as they are around the sweet siren song of quick, easy money draws us back. Remember in the end it is not your money. It is only borrowed money that needs to be paid back. Don’t be fooled like so many, credit is a loan and a credit card is a loan wrapped in a pretty design, flashy marketing and high interest.
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