There are many different types of debt that people find themselves in these days, from personal loans and store cards through to payday loans and credit cards. When it comes to the latter, the high rates of interest charged on many cards can make it very difficult to get yourself out of this debt unless you repay the balance in large chunks. As a result, many people find themselves drowning in credit card debt for many years.
Credit card debt tends to be very easy to get into but extremely difficult to get out of. In this article, I will talk about some of the great advice that financial gurus give on their books. These are tips that are simple to follow and can help you to avoid or more easily get out of credit card debt.
Some valuable tips that the experts recommend
When you have credit card debt, you will often find it difficult to make ends meet never mind be able to save some money for the future. This is why it is important to find ways to try and rid yourself of this type of debt, as it can cause a huge range of problems particularly if your credit card debt levels are high.
Taking advice from the experts that have penned some of the best finance books will provide you with a helping hand when it comes to unburdening yourself from this type of debt. You can then enjoy far greater financial freedom and a far better quality of life rather than worrying about paying money hand over fist to credit card companies. Some of the tips that experts recommend include:
- Look for cards with low rates of interest: If you are planning a big purchase and need to spread the payments, you should look for credit cards that offer the lowest rate of interest, as this will keep the overall debt level down. The interest rates charged on credit cards can vary widely, so it is important to do some comparisons in order to find a low rate one. However, if you have a low credit score, you will find it far more difficult to get a card with a reasonable rate of interest due to your credit history and status.
- Repay the balance in one go: When you have a credit card, your aim should always be to repay the balance in full at the end of each month wherever possible. As long as you clear the balance within the interest free period, you won’t have to worry about getting into credit card debt or paying any interest on your borrowing. If you cannot afford to pay in one go, at least try and pay it off in larger chunks. If you make only the minimum repayment, you will end up making payments on your credit card debt for years to come.
- Use a balance transfer card: If you have credit card debt on a number of different cards, look for a balance transfer card into which you can transfer all of these balanced. These cards generally offer a generous interest free period within which you can repay the transferred debt without being charged any interest. As long as you repay it in full by the end of the specified period, you can shave a fortune off the amount you would otherwise have paid including interest charges. You will need to check and see which balance transfer cards are able to offer you the credit limit that you need in order to transfer all of your balances. An added bonus to this is that you will only have one credit card company to deal with rather than several, which makes managing your personal finances easier.
- Pay off the highest rate card first: If you have a number of credit cards and you cannot get a balance transfer card, you should focus on repaying the highest interest card first. This will enable you to get rid of the debt that charges the most interest as quickly as possible. Once this is paid off, you can then move on to the card that has the second highest rate of interest and so on.
- Consider a low rate consolidation loan: Another thing you can do if you are unable to get a balance transfer card is to see whether you can get a consolidation loan to repay all of your credit card debts. The rates of interest on typical consolidation loans are far lower than on the average credit card. This means that you will avoid paying lots of interest and you won’t have to juggle a wide range of credit card debts.
These are just some of the valuable tips that you will find out about from experts that have written personal finance books such as the ones you will find on my blog. You can then start looking forward to having more financial freedom and far easier financial management without the burden of credit card debt hanging over your head.
Once you have repaid the debt
Once you have repaid the credit card debt, it is important not to get into that situation again. Whether you repay in chunks, through a balance transfer, or through consolidation, you need to make sure that you do not build up debt on those cards again. It is a good idea to simply close down your credit card accounts altogether and just keep one open in case of emergencies. However, this should only be for emergencies and not for frivolous spending.
Credit card debt is something that causes a lot of stress and additional problems for many people, which is why it is something that you definitely need to try and avoid in the future. Once you have paid off your debt, you can start living life to the full again but you have to exercise determination and willpower to ensure you do not end up back at square one.