Author: Benjamin Lee
Credit cards; on occasion they can be a lifesaver thanks to the easy access to cash. When mismanaged, however, runaway credit card debt may ruin your life.
A bit dramatic?
Perhaps, but the fact of the matter is; credit card debt is a major problem.
From shopping sprees to vacations, people are often guilty of using debt to finance their lifestyles. With the extortionate rates charged by banks, it’s easy for any outstanding credit card debt to quickly grow out of control.
The fact is, you shouldn’t be spending your time financing credit card debt. Why pay for somebody else’s vacation when you could be enjoying financial freedom. Take a look at these 4 foolproof methods of eliminating credit card debt.
1. Cash is king
Making all of your purchases in cash is one of the simplest yet most effective ways of controlling debt. Rather than accruing additional charges on your card, why not opt for cash payments instead.
Swiping a credit card has no emotional effect which tends to encourage impulse buying. At the end of the day, by the time the monthly credit statement has arrived, the damage has already been done.
Payments made in cash, however, are more “real” which allows us to keep better track of our cash flow. Every cent paid out is felt, and this, in turn, encourages self-discipline. On the long-term, you’ll become accustomed to controlling your expenses and avoiding debt.
2. Pay off your debts
Research conducted by CNBC in 2019 has shown that 70% of Americans will not be able to make their credit card payments. Further compounding (pun intended) this issue, is the high-interest rates charged on existing debt. When left unpaid, existing credit card debt will only grow larger and larger.
When faced with such insurmountable odds, chances are you’ll be quite tempted to only pay the minimum amount owed. Unfortunately, doing so only serves to increase the amount of interest paid to the bank while extending your debt period. Banks are guilty of this practice as it allows them to profit from your interest payments.
Instead, get ahead of debt by paying off the amount owed entirely or start making large monthly repayments. Set aside a portion of your salary every month to pay off more than the minimum amount owed.
It seems difficult at first, but you’ll gradually reduce your interest payments and amount owed. On the long-term, you’ll have paid off your debt while paying less interest.
3. Make use of balance transfer cards
Credit cards are a big business for banks and the competition between banks is usually fierce. Thus, in order to attract customers, banks sometimes offer zero percent credit cards with a balance transfer option. This scheme involves transferring existing credit card debt onto a new card, and for a period of time, you won’t be charged any interest.
This is useful if you have a clear timeline to clear of existing debt, as you won’t incur additional interest expense. A word of warning though; you should read through the terms and conditions of the agreement as some banks may charge you a fee for this service.
Also, the zero-interest card should not be used at all. Ideally, you’ll want to ensure that whatever debt transferred over gets paid off easily.
4. Get a side gig
Having trouble clearing your monthly credit card debts? Why not take on a side-gig and earn some extra cash on the side. Freelance work is flexible and allows you to work remotely, thus making it suitable for off days and after work hours.
From copywriting to design, the scope of work available to freelancers is virtually limitless. With some creativity, you may even be able to establish a flow of passive income. The extra cash picked up can help you pay the bills or clear existing card debt.
You can also take a gamble and try to bet on sports, like horse racing. You can watch online free live horse racing streaming to get knowledge on the subject, before taking your chances. Just be sure to wage responsibly, otherwise, you can risk more debt.
Pick these foolproof tips and you’ll have no trouble living a life free from credit card debt.