Four Step Approach To Tackle Your Credit Card Debts
Credit card debts with an annual interest rate of 24%-36% may turn into a nightmare as they suck out your savings but more importantly they take away your peace of mind.
1.Note down all your debts: Seems simple and obvious right. But listing out clearly the amount you owe to each credit card, their interest rate, yearly fee charged etc. can give you a clear picture of your debts. Do it on an excel sheet.
- Pay high interest bills first: Prioritize paying credit card bill with high interest first. This will help you save on the exorbitant interest amount.
- Halt Investment for time being: Now the priority is getting out of debt so for the time being dedicate any extra income or gains towards paying credit card debt.
- Balance Transfer: You can opt to transfer the outstanding balance of your credit card debts to another credit card with a much lower rate of interest. Some cards also provide 0% interest rate on balance transfer for a certain period.
- Pay Bills on time: This advice is for future, after you have got out of credit card debt, pay all your card bills on time in full settlement.