by Billy Funderburk, CFP®, MBA
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
Have a Strategy – Before you begin whittling away at your credit card debt, sit down and map out an overall strategy. Make the next six steps the centerpiece of that strategy.
Move to Lower Interest Rate Cards – Look at the interest rates that you are paying and work to get those as low as possible. Many credit cards will give you an introductory 0% rate for a limited time. Apply for those cards and move as much of your balances as possible to those cards.
Pay Off Higher Interest Rate Cards First – In mapping out your repayment strategy, target your higher interest rate cards first.Pay extra on those as you can.
Pay Off the Card With the Lowest Balance – Though this might conflict with number three, sometimes it can give you an emotional boost to pay off a card. Give yourself a “win” when you can.
Pay Cash for a Specified Time Period – The next three strategies related to your personal habits. Certain bad habits lead us to have elevated levels of credit card debt and we need to eliminate those to keep from “back sliding.” If you force yourself to pay cash for a while (a few months perhaps), you’ll find that you can only do so much damage with the cash in your pocket. When it runs out, you stop spending.
Stop Buying Those Lattes – Look at your spending overall. Are there vices that you could do without? For the time being, let’s remove a few.
48 Hour Rule – Before making a large purchase, force yourself to delay that purchase for a least 48 hours. This will remove impulse buys entirely and help you to make better purchasing decisions.