In Q1 2022, there were 537 million credit card accounts in the United States, an increase of 6% or 31 million from Q1 2021. It just means Americans are fond of using credit cards for convenience.
However, there are many of those who are in deep debt because of credit card use. They are looking for ways to get out of debt. If you’ve been caught in a vortex of credit card debt, you’re probably wondering whether there’s an answer.
Though credit card debt can weigh heavily on your credit history and wallet, you can find your way out. Here’s how.
Evaluate Your Debt
The first step to getting an answer to how to get out of debt is to evaluate your debt. Look at how much you owe, the interest rate, and whether you can afford the minimum payments. Once you’ve done that, you can start to develop a plan to pay off your debt.
There are a few different ways to do this, and the best method for you will depend on your individual circumstances. You can work with a debt consolidation company or negotiate with your credit card company for a lower interest rate.
Double Your Minimum Payment
One strategy to get out of debt faster is to double your minimum payment. This means if your minimum payment is $50, you’ll pay $100 each month until your debt is paid off.
While this will take longer to pay off your debt if you only make the minimum payment, you’ll save money in interest and pay off your debt quicker. To make this strategy work, you’ll need to be disciplined with your spending and ensure you don’t use your credit cards while paying off your debt.
Transfer Balance to a 0% Credit Card
One of the ways to get out of credit card debt is to transfer the balance to a 0% interest credit card. This will allow you to pay off the debt without accruing interest. However, you will need to be diligent in making your payments as the interest-free period will eventually end.
There are also balance transfer fees that can add to your debt. Be sure to do your research before you make a decision.
Use Emergency Funds to Pay Off Highest-Rate Cards
If you’re looking to get out of debt as quickly as possible, you must first focus on paying off your cards with the highest interest rates. You may need to get creative with raising money to do this.
One option is to tap into your home equity by taking out a low-interest loan or line of credit. You can also ask family and friends for a loan or look into peer-to-peer lending. Also, try to get some emergency funds that you can use to pay off your debt.
Apply These Methods to Put an End to Credit Card Debt
It can be exciting to use credit cards. However, it gets too late to realize that you have accumulated purchases and can no longer settle the dues on time. This is because you don’t have to pay upfront and wait several weeks before you pay for your purchase.
Hence, you need to know how to get out of credit card debt. The points above can surely help out those who are struggling with this problem.
But you need to be patient and disciplined. Getting out of debt takes time, but you’ll eventually be debt-free if you’re consistent with your payments.
For more on financial topics, keep browsing the rest of the site.