Do you have a credit card, or multiple credit cards that you would love to pay off?
Despite what you read, there is no hocus pocus that erases debt.
However, paying off debt can be made a little easier by following a simple three-step strategy.
My Story
Years ago, Brian and I incurred medical debt that we were unable to pay in full. Our attempts to pay it off were rocky. We would make a large payment one month, only to be able to pay little or nothing the next month.
Eventually, the debt was turned into collections.
The collection agency was a local business and willing to work with us. We agreed on a very doable payment of twenty-five dollars a month to be paid until the debt was paid in full.
Every month I consistently mailed our check for twenty-five dollars (this was pre-online access). And while it didn’t happen overnight, eventually we were able to settle the account.
That experience taught me a very doable, common-sense approach to paying off debt.
If you have credit card debt that you’d love to get rid of, put this three-step strategy in place and eventually the debt will be a thing of the past.
Stop using the credit card
If you want to pay off a credit card, the first thing you have to do is quit using the card.
This is key.
Adding new debt to a credit card while you’re paying off old debt is kind of like shoveling snow while it’s still snowing. You might keep from getting snowed in, but the sidewalk will never be quite clear.
Quit using the card that you want to pay off.
Decide on a payment amount that you can realistically stick to until the card is paid off.
Trying to keep up with a payment that’s too large for your budget sets you up for failure.
Making too small of a payment will cause the debt, and interest, to linger for years.
Like Goldilocks, it’s important to get the payment amount just right.
Consult your zero-based budget and use a debt calculator to help you figure out at what amount to set your monthly payment.
Keep in mind that you will be required to make the minimum required payment found on your credit card statement. Make every effort to set your payment higher than the required minimum.
Make all payments consistently.
It goes without saying, but don’t miss payments.
Make paying the agreed upon amount a priority.
The additional interest and late fees that are the result of missed payments makes paying off a credit card even more difficult.
Repeat this process for every credit card you want to pay off.
If you have multiple credit cards to pay off, decide which one you would like to pay off first.
Assign that card the larger monthly payment.
Once that card is paid off, reevaluate your budget and get to work on the next card.
Note: If you are unable to meet the minimum payments, I’s time to take drastic action. Start calling the credit card companies to negotiate lower interest rates and doable payment plans.
Don’t make the mistake of confusing simple with easy.
Paying off a credit card, or any kind of debt, is not easy.
It takes a long-term commitment.
However, by following this simple three-step strategy, you will eventually find that you have successfully paid off your credit card.
And what a happy day that will be!
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