Are you stressed out because of your unending credit card loans? Are you sick of paying credit card annual fees and charges? You won’t be able to solve this problem if you keep on applying for a new credit card every month. Banks will continue to give you offers because it’s their job and that’s where they are earnings. The interests and charges you are paying are what keep their business going. But, do you have to think first about them or do you want to get rid of your debts?
To remove the biggest dilemma of your life, it’s time to pay off your credit card debts with a few easy and simple steps.
1) Check how much income you are getting for a month.
The first step is assessing how much income you are getting for a month. Getting a total of your earnings will help you check if you have the capability to pay for your credit card loans or not. If you think your money is enough to keep your cards open, you are on the wrong track. The amount of your income is only the basis of your budget so you can start paying your loans in full. The next steps are more important to get rid of your problems fast.
2) Count how many credit cards you have and how frequently you are using them.
Once you’ve come up with a total amount of your income, the next step is checking how many credit cards you have. Some people have 10 or more. If you have the same number, you should evaluate how frequently you use them. This will allow you to choose which are to close and which are to retain. That’s right. You need to close some of them if you want to pay off your debts quickly. Some of your cards, if not all, have annual membership fees that are adding to your expenses. You also need to remove them from the picture. You don’t need 10 cards or more and pay 10x the membership fee.
3) Choose the cards that you will close.
Next, free yourself from paying annual fees by choosing the cards you will close. There are many factors you have to consider under this step. For instance, you can cut the cards with the highest annual fees or interest rates, You can retain those with lower fees and free annual charges. Also, you can consider how frequently you use the cards. Cut all the cards that you don’t utilize.
4) Pay your outstanding balance and call the bank.
After choosing the cards to close, you need to check how much outstanding balances are left so you can pay them. Pay them in full as much as you can so you can immediately call the bank and close the cards. While talking to the bank, the customer service representative will likely negotiate with you so you won’t close it. He/She may even offer you free interest rates for the month or free annual fees. Don’t fall into this trap. Remember that your goal is to pay off your credit card loans and cut some of your cards.
5) Make sure you don’t have any late payments or limit fees.
Closing some of your cards won’t take too much time. After you’ve closed them, check the cards you retain for any outstanding balances, late payments, and limit fees. You also need to pay them in full. If you don’t have enough money yet, check with the bank if you can waive the fees charged against your account. Try to negotiate with them. If you are successful, you will surely pay less.
6) Switch to using a debit card.
Retaining 1-3 credit cards should be enough as a backup. The most important step is switching from credit to a debit card. Debit cards are better because they basically work as your savings card. You will be motivated to save more and put more cash in it because you know that you have to use them, later on, to pay for your expenses. What you need are enough funds to cover your bills and expenses. Using a debit card will help you get rid of your credit card debts.