5 Tips for Paying Down Credit Card Debt

Debt is a Prison, Money is Freedom

Money is freedom for sure. I’m not talking about oodles and oodles of dough, OK? I’m talking about enough cash to free you from debt and cover your basic necessities with a little extra cushion in savings to carry you through the lean times. As an artist, you can pretty much bank on the lean times coming. Maybe you are experiencing them right now. Not a problem, if you’re prepared for it.

Pay it Down

If you want to be free, you need to be free of debt. That should be your number one priority right now. What good is socking away money in a low interest savings account while paying many times that rate on credit card debt? It makes no sense—it makes no cents! It’s great to have money in interest-bearing accounts, but if you have credit card debt, you need to tackle that first or the interest earned will be canceled out by the interest paid. Right now, you need to focus on reducing your credit card debt.

To find the money you’ll need to pay off credit card debt, read this post. If you really want to be hardcore about paying down your debt, get a second job for awhile. Dedicate one hundred percent of those earnings to taking care of your debt. That little bit of freedom you give up now, will pay dividends on the back end.

Americans: We Love Credit Cards!

Nearly 40 percent of American households carry credit card debt. The less a household makes, the more credit card debt that household carries—an average of over ten thousand dollars. Talk about a vicious circle. The total outstanding consumer debt in the US is $3.4 trillion. Somebody is getting rich off all that debt and it ain’t artists. You don’t want to make credit card companies richer and neither do I. Pay down that debt and pay off the balance every month. Better yet, take a scissors to those credit cards.

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Take Control of Your Credit Card Debt

Want to get your credit card debt under control? Try these suggestions out:

1. Overpay every month

Pay more than the minimum balance. Every month. Pay $50 on a balance with a $25 minimum payment. You’ll pay that balance down twice as fast. It’s just simple math. Can’t pay $50? Pay $40 or $30—any amount above the minimum is more money in your pocket. I know it won’t seem like it, but it is.

2. Pay It Again, Sam

If you can, make multiple payments per month. If you bank online, schedule extra payments throughout the month. Credit card companies want you to pay the minimum. They want to continue to make money off of you forever and ever. Let them earn it off some other sucker, not you.

3. Consolidate Debt

Many credit card companies will offer you the opportunity to make balance transfers. You can switch the balance of higher interest rate cards to lower ones. These transfers are rarely offered for free, however. Doing so may require that you pay something like 3% of the balance or a set minimum fee. Read the fine print and make sure you’re not trading in lower interest rate for a hight upfront service charge.

4. Prioritze

Pay off cards with higher interest rates first. This should go without saying. It doesn’t matter how insurmountable that credit card balance may seem, pay the cards with the higher interest rates first and you’ll save money.

5. Stop Using Your Credit Cards Completely!

If you want to eliminate your future credit card debt, eliminate your current credit cards. I know this is not an easy thing to do, and to be honest, I’ve never done it. My debt is under control, however, because I follow my own advice. Here’s a trick: call your credit card company and tell them you want to cancel your card. There’s a pretty good chance, if you’ve been a cardholder for a few years, they will offer to lower your interest rate right then and there.

Let me know your experiences with credit card debt and if you’ve found this advice helpful. Looking for more ways to save money? Read my post on growing your own fruits and veggies and why you should park that car and ridea bike instead.

 

 

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