In an article written by CNBC last year, they warned that “The Next Recession Could Crush Many with Credit Card Debt”. Unfortunately, because of the COVID-19 pandemic, the next big recession might come sooner than expected. The big question now is “are you financially ready for it?” Here are 7 Tips On How to Pay Off Credit Card Debt which I believe will help you get ready for the next biggest economic meltdown.
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Overview: 7 Tips On How to Pay Off Credit Card Debt
- Learn How to Change Habits
- Set a Goal
- Create a Budget
- Use the Avalanche Method or Snowball Method
- Pay with Your Credit Card Points
- Find a Support Group
- Spend Less and/or Make More
Benefits of No Credit Card Debt
- You can sleep at night
- You can survive an unexpected economic downturn
- You are a freeman
- You don’t pay a premium on the things you buy
- You own everything you have
7 Tips On How to Pay Off Credit Card Debt
1. Learn How to Change Habits
Learn how to change habits?
I know right? The first in the list is probably the least you expected to do to pay off your credit card debt. In reality, the reason why you are in debt is because of your bad spending habit!
Trust me. You can enroll in the most expensive debt-repaying courses, read a dozen personal finance books or watch or listen to webinars and podcasts yet all of this will be useless if you will not change your spending habits.
Try it. A simple skip to your fast-food-and-coffee-run-every-day habit can help you save hundreds of dollars per year.
I recommend “Habit Loop” and “Atomic Habits”, if you are interested in learning more about how you can change your habits.
2. Have a Goal
Reflect on this.
There are two guys, Kevin and Tom, who would like to pay off their $20k debt.
Kevin wants to pay it off because he will be soon a father and wanted to buy a house. His $20k debt is disqualifying him to apply for a mortgage.
Tom wants to pay off his $20k debt for no apparent reason.
Who do you think will likely going to be able to pay off their debt.
I’ll bet you it will be Kevin because he has a goal!
That said, I urge you to create a goal as to why you want to pay off your debt. Your goal should be specific, measurable, attainable, reasonable, timely, or also know as a SMART goal.
Having a goal is important because it will help you stay on track, encourage you to keep paying off your debt even if things get hard, and it can be your reminder of why you need to keep moving forward.
4. Create a Budget
I know this tip is boring, unappealing, and tedious. However, if you are serious about paying off your credit card debt, then you know that you must do whatever it takes to pay it off.
Having a budget will help you with your spending decisions. Without it, you wouldn’t know how much money you earn every month, how much of it you need to spend on essential items, how much of it you actually spend, and how much of it you need to set aside to pay off your debt.
In other words, your budget is your map that will help you navigate towards debt-free life!
5. Use the Avalanche Method or Snowball Method
Avalanche and snowball method are 2 of the most popular way to pay for your debt. If this is your first time hearing these methods, then here is a crash course for you.
Note: These methods are only good if you have multiple credit cards. If you only have one huge debt
Avalanche Method:
In this method, you identify which of your credit card has the highest interest rate then you pay it off first. Once you are done paying it off, you go to the next credit card with the highest interest rate. Repeat the process until you pay off all of your credit cards.
People love this strategy because, mathematically speaking, you save more on interest.
Snowball Method:
In this method, you identify which of your credit card has the least balance then you pay it off first. Once you are done paying it off, you go to the next credit card with the least balance. Do this until you pay off all of your credit cards.
People love this strategy because, psychologically speaking, small wins can lead to momentum and that momentum will help you destroy your credit card debt.
6. Pay with Your Credit Card Points
This tip will only work IF YOU ALREADY HAVE a lot of accumulated points. If you don’t have points ALREADY saved up, DO NOT BUY MORE STUFF
to accumulate points. If you do that, you will just gonna end up in a deeper financial hole.
So IF YOU ALREADY HAVE points, see if your credit card company or bank allows you to pay off your credit using your points. If they do, then use your points to pay off some of your credit.
7. Find a Support Group or a Mentor
Another weird tip, but an effective way to pay of your credit card debt is to find a support group. Kinda like alcoholic anonymous or, if you belong to a church, your growth group or bible study group.
(maybe add a study) Having someone or people walking with you on your journey to debt-free life will increase your chances of succeeding.
When choosing a person or group, make sure they are debt-free or else how can they help or teach you how to get out and stay out of debt. Also, pick a people whom you can share your financial information and trust that they will not disclose it to others. They should also be non-judgmental on your struggles. Finally, pick a person that you
8. Spend Less and/or Make More
Well, this one is kind of obvious. If you don’t have enough to pay your credit card bills then stop using it and stop spending on unnecessary things. Do that and in the end, I can guarantee you that you will have extra money at the end of the month.
So what are you gonna do with the extra money?
Use it to pay off your credit card bills of course.
If you are in an unfortunate event and you are already spending only on necessary things then the option for you to take is to make more money.
There are different ways to make more money.
You can find another job or work longer hours. If that is not an option for you, then why not start an online business or side-hustle.
Lucky for you, we had the internet for quite some time now and more and more people had become dependent on it and made it part of their lives. That said, you can literally sell anything on the internet making the concept of online business legit and possible.
BONUS:
Make More Money with Blogging
If you will ask me what is the best way to make money online, my answer would be blogging. The easiest and safest way to test out online business is by writing, managing, and monetizing a blog.
Blogging is quintessential to businesses that even big businesses have a blog section on their company websites. In the age of the internet, a business without a blog can easily lose x amount of revenue (find source). In addition, try opening your Google and type any word in the search bar. I can guarantee you that over 95% of the search result is someone’s blog.
There are many ways to monetize your blog. Some of the most popular ways are through Ad Revenue and Affiliate Marketing. If you want to learn more about how to monetize a blog you can check out my article, “(insert link)”.
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Summary
That’s all Wealth Builders!
I hope you enjoyed reading this article and most importantly, I hope you got value out of it.
Quickly, the 7 Tips On How to Pay Off Credit Card Debt are:
- Learn How to Change Habits
- Set a Goal
- Create a Budget
- Use Avalanche Method or Snowball Method
- Pay with Your Credit Card Points
- Find a Support Group
- Spend Less and/or Make More
Which of these will you most like going to do?
Which one you think is impossible to do?
Do you have more tips to share?