If you were to ask just about any financial consultant about something that you should be cautious of when it comes to credit cards, one of the first things they’re probably going to tell you is to make sure that you check the interest rate on the cards that you use. The reason why is because ones that come with a high rate are prone to put you into a significant amount of debt.
If you’re someone who has learned this the hard way, there’s hope. All you need to do is put a solid high-interest debt elimination plan in place. If you’d like to know how to do that, here are five great tips to get your started.
Request a lower interest rate. This is one thing that not all credit card companies are willing to do, but it’s certainly worth a try asking them to reduce your interest rate. When it comes to this tip, the thing that you need to keep in mind is creditors are typically willing to do this for customers who pay their bills on time. So, if they do happen to deny you, the good news is that they typically will provide tips on how you can eventually get your interest rate reduced in the future.
Pay off as much debt as possible. Although you certainly have the option of paying the minimum balance on your credit card statement, the challenge with that is you could look up and realize that months later, you’re only paying on the interest. You can avoid this trap by paying off as much of your balance as you possibly can.
Reduce your expenses. There are a lot of people who find themselves in high-interest debt because they’re relying on the credit cards to pay for things that they want but don’t really need. If you’ve got a big cable package, a home phone or you’re spending more money on things like entertainment and travel than you can actually afford, it’s a good idea to reduce your expenses, at least temporarily. As a result of the money that you save, you can start eliminating some of your debt. (For the record, it’s best to pay off your smallest debts first and then work your way up to the larger ones).
Stick to a budget. When you’re looking to tackle high-interest debt, you’re honestly going to have a challenging time eliminating debt if you don’t create a budget and then commit to sticking to it. However, by putting a budget into place, not only can you set money aside to pay off the debts that you already have, but it can also help you prevent future debt from accumulating. If you’ve never really made a budget before, Money Crashers is one website that can show you how. Just go to the site and put “how to make a budget” in the search field.
Get some counseling. If you’re overwhelmed, it’s OK to seek some counseling. After all, financial planners are skilled in providing great information on how to eliminate debt along with how to make financially responsible decisions. For tips on how to find a reputable financial advisor within your area, visit Money Over 55 and put “how to find a financial advisor when you’re not rich” in the search field.