Everyone likes to spend like a millionaire even though they are not. To capitalize on this fantasy are the credit card companies.
There are just so many credit cards that are available.
It can be quite easy to get caught up in the illusion that you can buy whatever you want with your credit cards. In reality it is not so.
And we all know it! Credit cards are just a way of making your purchases easier. They allow you to buy anything you want on credit.
But now, you have to pay back within a certain period of time. And when you don’t, interest payments are charged on your debt.
What most people tend to overlook is that you have to pay back the money that you are borrowing.
These are the people who end up in debt badly and then fumble for ways and means to get out of it.
Using the Balance Transfer Method to Consolidate and Get Out of Debt
The best way for paying down your credit card debts is by going for debt consolidation.
Do you have multiple credit cards? Are you carrying debt on several of them?
You can transfer your credit card balances and consolidate your debt.
And you can end up paying off your debt completely as long as you stay focused.
Balance transfers are quite easy. All you do is transfer all the balances that you have in your high interest credit cards to the one with the lowest interest rate.
Now you can just make ONE payment,that is, on the card to which you have transferred all the balances in order to pay back all your debts.
Along with this you get to pay the interest rate that is on the lowest credit card for all your debts.
Here’s the one step you need to do after consolidation
Now you have a lower monthly payment, right? Add up any extra money that would have previously gone to make the TOTAL of the minimum payments on ALL your other credit cards.
Just for this example, let’s assume that the TOTAL of your minimum payments for all your others credit cards combined is $300.00.
So once a month, you make the MINIMUM payment required for that one card that now holds all your debt.
Now add the $300.00 extra.
Got it? You are not losing any money; right now you aren’t gaining any money either.
But you are! You just haven’t realized that yet. Think about it.
Your total debt just went down by an EXTRA $300.00. Do that every month and see just how faster you can totally wipe out your debt.
Balance transfer card
You can also use a balance transfer card to transfer your credit card balance.
A balance transfer card can be obtained from credit card companies at extremely low rate of interest such as 1% or 2%.
You can transfer your credit card balances to this one balance transfer card and pay them back at the low rate of interest.
However, you should remember that this low interest rate is an introductory offer that lasts for a certain period of time.
If you are unable to pay your debts within that time the rate of interest will rise up quite a lot higher.
After you transfer your credit card balances
After you transfer your credit card balances, you then NEED to adopt ways to save money and reduce your expenses.
This can be done in many ways but the best thing would be to reduce your everyday expenses so that you can save a little money every day.
Here are some pretty easy (and painless) ways to cut your expenses:
- Walking for distances that can be walked instead of taking your car or the bus
- Decreasing your utility bills by cutting back on your telephone bills
- Turn off any lights that don’t absolutely need to be on
- Cooking your meals at home instead of eating out
By doing things like this you can cut your expenses by a lot. Then use that money you save to pay down your credit card in a much faster time period.
Want to read about 8 ways to reduce debt on your own?
Wondering what your credit rating is and if you need to improve it?
You may want to read about 5 things to keep in mind when consolidating debt?
Valentina R. Allison is a financial writer who has profound knowledge on the contemporary financial issues. She loves dealing with financial topics that are relevant in the US. Some topics covered by her are debt solutions that can eliminate debt, how can businesses delete their debts by leveraging the social media and many more. For information, join @debtcc.
