Credit Card Debt: 7 Step Action Plan

Are credits cards good or bad for you? For many people, it’s both. When times are tough it’s very comforting to be able to use your credit card to buy the things you need. However, that same convenience of use can quickly become a problem. Credit card interest rates are quite high, which makes it very difficult to pay off. So what can you do to pay off your credit card debt?

How to Pay Off Your Credit Card Debt: Goals

There’s only one way to get out of debt – live within your means. Of course, this is easier said than done because it’s hard to stop yourself from buying the things that you want. Credit cards make it easy to indulge yourself with luxuries but these debts can quickly snowball.  If you are not able to regularly pay your credit card bills, this can spoil your credit rating. So before that happens, think about the tips and advice given in this simple plan for getting out of debt.

How to Pay Off Your Credit Card Debt: 7 Step Action Plan

7. Stop buying expensive items you can’t afford.
If you are now in a place where debt is a problem then cutting down on luxuries is a must. Focus on the things you really need. The extra money that you would have spent on frivolous things can be used to pay off your credit card bills.

6. Swap expensive hobbies for lower-priced ones.
Having a hobby is generally a good thing but if it costs so much that you have a hard time paying your bills, you can just swap it for a less expensive hobby.  For example, do you love to do scrapbooking? You can still pursue your interests; just stop using the costliest paper and decorations for your hobby. Recycle stuff instead, it’s good for the environment and your bank account.  To give another example, if you want to exercise to lose weight, don’t go for a gym membership that costs a lot of money. Take up jogging, it’s free and burns a lot of calories.

5. Get a notebook and write down all your purchases.
The little things add up. Sometimes you may not notice that you actually spend a lot of money on everyday items like soda and juice. If you keep a daily dairy you can spot many different ways to save money on small things.


4. Get a debit card.
Obviously, no one nowadays wants to carry a lot of cash around. Since you need some plastic, get a debit card so you won’t have to use your credit card when your cash on hand is not enough for whatever you need to buy.  This is also a good way to keep track of your spending. If you really want to be strict about your budget you can transfer a set amount to your debit card each week. Having no extra money on hand can help you stick to your financial plan.

3. Don’t use your credit card.
This one is quite tough to do when you are struggling to pay the bills because it’s so tempting to just use your credit card and worry about the bills later.  Unfortunately, it’s simply not that easy. Credit card interest rates are quite high so paying the bills with credit cards when you don’t have enough money is like putting fuel on the fire. You will just get deeper into debt.  When you get your debit card, leave your credit card at home. It’s still there in case you need money for an emergency but not having it on hand makes it easier to resist using your credit card.

2. Look for cheaper services.
Bills like electricity, gas, water, phone, cable TV, internet, etc. are so hard to pay each month when you have a lot of debt to pay off. Try switching to a cheaper utilities company or service provider; there are many companies out there that may offer a better service for less money.

1. Sit down and plan your budget.
The top tip is to just sit down, find out where you are in terms of your family or personal finances and create a monthly budget.  Get all of your financial records – your daily spending diary, checkbook, credit card bill, utilities bills, etc.  Separate the essential expenses, like mortgage and utilities, from the inessential ones like restaurant bills and movie tickets.  Total up each list separately. This will tell you how much you really need to spend and what you can cut back on.
How to Pay Off Your Credit Card Debt: Summary and Conclusion
Hopefully this 7 Step Debt Action plan has given you some good ideas.  It’s not easy to cut down on daily and monthly expenses but it can be done. In the end, paying off your debts and becoming financially healthy boils down to just two simple things: keeping track of your expenses and taking control of your spending.

http://www.debtplan.org/