The amount of credit card debt held by the average American has soared over the last few years. Reports show that the majority of families have 2 to 4 credit cards, each holding thousands of dollars in debt. Most people find it difficult to get out of debt, many simply because they lack the knowledge or tools to do so. However, getting out of credit card debt doesn’t have to be impossible, following a few simple tips can put anyone on the path to financial freedom.
The most important aspect of getting out of debt is prioritizing it. That means creating a monthly budget that specifically outlines how much can be paid towards debt payments. Repaying a debt should be viewed as a monthly essential expense, not an expense for “when there is extra money” around. Find out exactly how much income can be devoted towards debt payments and make it a priority to follow through.
Many people are unaware of their right to negotiations with their creditors directly. Credit card negotiations are a great way to make getting out of debt easier. Many creditors are willing to waive delinquency fees, lower monthly payments or interest rates, and even freeze interest rates for a specified period of time. By changing the terms of the account, it is easier to free up more money to make consistent payments towards the debts.
Once a budget has been developed and an agreement has been made with the creditor, it is highly important that payments are made on a timely basis. Without a structured payment schedule, getting out of debt can take years longer than necessary. It may be helpful to set up an automatic draft of the payment each month to ensure payments are made consistently and without error.