You are the problem. It’s time to face it. If you have a bunch of credit card debt and you’re drowning in it, don’t blame the credit cards. They didn’t cause you to buy things you couldn’t afford. They were in your wallet and you made the decision to take the easy way out and spend money on things you could not afford. It’s not the credit card’s fault, it’s your fault. But we are not here to lay blame, we are here to help. You have to first realize that you are the problem and then you can work to make the problem go away. Getting out of credit card debt isn’t easy and it’s not fun. However it is possible, and we can help you. We have 10 steps that we’ve designed to get you out of debt and keep you out of debt as long as you shall live. Take our advice, you need it.
Put Your Credit Cards Away
Take them out of your bag. Put them away. You don’t have to cut them up or get rid of them completely unless you have so many you can’t figure out what to do with them. However, for the moment you need to get rid of them by putting them away. Put them in the freezer in a block of water that will turn to ice. Better yet, put them in a safe deposit box at the bank where you really cannot get to them easily. Just get them out of the house and out of your life; and do not try to memorize the numbers.
Admit You Have a Credit Card Problem
It’s time to admit that you have a spending problem. You are in debt because you have a problem. Maybe you’re not addicting to shoes or online shopping, but maybe you lost your job and allowed yourself to spiral out of control in terms of debt because you were trying to overcompensate for your lack of income. Whatever it is, you caused the problem and it’s time to admit it. You need to admit this so that you can fix this. Go ahead; say it out loud. “I have a problem. I ran up my credit card debt. It was my fault,” and move on.
Stop Using Credit Cards
Now you know you have a problem, stop using your credit. Stop making purchases on your credit cards because you cannot afford it. From this point forward, you are no longer allowed to or permitted to use credit to purchase anything. If you cannot afford it, wait until you can. If you can’t afford it, you don’t need it. Just stop. You will learn the value of a dollar, saving and hard work if you stop giving yourself what you want when you want it. Have some self respect and some self-control already.
Calculate Your Credit Card Debt
This is going to be difficult. You might have a ballpark, but you probably have no real idea what you owe and to whom. You need to calculate every last debt you have, to whom you owe it, your interest rates and your payments. You have to know every single detail about your debt if you ever plan on getting out of your black hole of monthly payments.
Consolidate Credit Card Debt If Possible
Now that you know what you owe, try to consolidate. This might work if your credit is still good. You might be able to consolidate all your debt into one payment with one interest rate, which will save you a lot of money. You might not be able to consolidate it all, but you might be able to do a little. Do what you can by choosing the most expensive cards first to consolidate. But remember that most expensive does not always mean cards with the highest balances. Lower-balanced cards with high interest rates might actually be more expensive than you thought.
Lower Your Credit Card Payments
Now that you know what you owe and to whom, call your creditors if you haven’t been able to consolidate some of your debts. They’re surprisingly more likely to work with you if you admit you have a problem than you might assume. Tell them you have debt and that you have to pay it off. Tell them that you can’t afford your payments, that you’re trying to get out of debt and ask them if they can lower your interest rates or do anything at all to help you so that you can make your payments more affordable and on time.
Create a Plan
Now you have to reevaluate your debts based on any changes you made by consolidation and by lowering your payments. Create a plan that will help you pay off your debts and stay out of it forever. This means figuring out how long it will take you to pay off your debts with your current income and how much you can afford to allot to your debt each month. This also means creating a plan that will allow you to save money so you always have an emergency fund that won’t make you rely on credit cards in the future.
Create a Budget
Now that you have a plan in place, add it to your budget. You need to account for every single dollar that comes out of your pocket for expenses and every single dollar that comes into your home. You need to put as much of it as you can toward your debt to pay it off, and you need to make sure you’re also saving a bit. We recommend you have at least $1000 in savings so that you never have to worry about things happening in the future.
Cut Unnecessary Spending
Sorry lattes and movie nights and happy hours with friends; you’re never going to get out of debt if you keep spending, so it is time to cut it all out and put it all toward your debt. When you are debt free, you can buy all the lattes and happy hour cocktails and see all the movies you want. Until then, you are paying off debt and living frugally.
Say No to Things Now for a Better Later
If it’s not in the budget, you can’t have it. A new car, a new house, or anything like a vacation you feel you could splurge on because you have savings now is out of the question until your debt is completely gone and you can afford it. If you have debt, you cannot afford other things in your life. Say no to those things now and you will end up being able to say yes to things that are far more fun and far more entertaining in the future. Trust us on this one.
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