Why Credit Card Debt Is SO Difficult To Manage
It’s a tricky topic but the reason why so many parents remain in debt is always pretty clear.
There’s no need to act like it’s a hidden secret; you’re spending money that you don’t really have.
Relying on loans to buy things that you can’t afford is a sign that you’re mismanaging your debt and it’s important to know that this has dreadful long-term effects, including poor credit ratings or even worse your inability to spend quality time with your children.
A good way to start healthily managing credit debt is to adopt an effective payment strategy.
Even though there are many clever ways available, remember that not every method will suit your needs.
5 Steps to Managing Payments Credit Card Debt repayments
Step 1: Dealing with the Smallest Debt First
It’s one thing to look at debts as a combined amount that needs to be paid off, but that doesn’t mean you should treat all of them as equal. After all, one less debt to pay off essentially means less stress, which sounds like good news.
After paying the minimum payment on all your credit cards, move on to focus on the total payment of at least one card. Ideally, this should be the one with the smallest debt.
This helps you in crossing out a whole debt, and not letting it grow back because of heavy interest rates.
Step 2: Avoid Minimum Payments
If you ever thought that paying the minimum on your credit statement was enough, think again.
Paying the minimum payment on your credit card dues will mean taking much longer to pay off dues.
That’s why it’ll pay off (literally) to add a little more to that minimum monthly payment.
Every pound you pay above the minimum will reduce the amount and the interest you have to pay.
Step 3: The Importance of Automation
If you’re still carelessly remembering which payments go out on which dates, then you’re not managing the whole debt payment process very well. If you’re living in 2018 without turning over your debts to automation, then are you really living in 2018?
It’s time to take advantage of the convenience that a simple app and nominal fee can provide. Automated personal finance management applications can send out your payments directly from your bank account so you don’t have to.
Aside from that, they also offer other perks like deducting bill amounts a little earlier so you can focus on your kids instead of carelessly spending money.
Step 4: Considering Debt Consolidation or a Personal Loan
Even though many of your friends may suggest that debt consolidation or a personal loan is a practical approach towards paying off debt, it’s important to think whether you need to do so or not.
Combining all your debts into one may seem exciting, but high-interest rates make it a mere illusion of being beneficial. These prove to be a real hassle and it’s better to keep these as last resort options.
Step 5: Dealing with Creditors
Creditors can really suck up the energy from a home with a single call, but it’s in your best interest to know how you can deal with them.
Firstly, remember that each creditor has different powers, depending upon who they’re backed by.
If a creditor has somewhat stronger powers, it’s advisable to deal with them first.
Aside from that, remember to keep copies of any exchange that happens between you and your creditor.
Know your rights; just because you owe them money doesn’t give creditors the authority to subject you to unlawful treatment.
These are just a few starting points to help you get motivated towards eradicating your debt.
If you’re worried about outstanding debt and are considering the above mentioned LAST resorts, maybe you should reconsider.
That’s because here at Aunt Meg we can help you manage your debt before you ever need to consider last resort options such as loan consolidation or personal loans.
All you need to do is to hit Get Started and we will give you a call back, it’s that easy!