If you haven’t been able to pay off your credit cards, don’t lose hope. The reasons why people can’t seem to live a debt-free life often point back to psychology. Think about it – you have every company in the world vying for every penny you make and their advertising budgets are massive. The cards are definitely stacked against you – but don’t give up! These simple tips can help you pay off your balances faster while giving you confidence that you’re winning the debt battle.
- Make a promise to yourself – Start by establishing a monthly amount you are willing to pay toward all your credit cards over and above the minimum payments. There’s no rule about how much you should pay above the minimum so start with what you can afford. The more you can commit, the faster you’ll pay your cards off so try and challenge yourself a bit. But keep in mind that you don’t want to get into a crunch because you’ve overcommitted. Paying off cards is a discipline and you need to be able to stick to the amount and the promise you’ve made yourself.
- Focus on the card with the lowest balance first – Some advisors will tell you you’ll save money by focusing on the card with the highest rate first, which may be true, but I actually recommend another strategy that uses reverse psychology to your advantage. If you can knock out just one card, you’ll feel like you’re winning! So how do you do it successfully? Start by paying the minimum payments on all credit cards except the one with the lowest balance. On it, you’ll want to make the minimum payment plus the extra amount you’ve committed to paying on debt each month. All that extra should go to this one card. Continue doing this until the balance is paid off entirely. Once you’ve paid it off, [celebrate!!! then] take the full amount you were paying on that card (the minimum payment plus the extra) and start focusing on the next card with the lowest balance. This means you’ll be paying the total payment from the first card plus the minimum payment on the second card. You’ll be able to knock this one out much faster than you think!
- Stop charging – You owe it to yourself to permanently save the money that you’ve been paying on those cards! Think about how much money you’d have extra each month if they were gone! Don’t let yourself be fooled by zero percent offers, travel points or the old adage that credit cards are there for emergencies. Even the mentality that you need to keep a card for a rental car can be detrimental to your financial health. If you don’t use them, you won’t be a slave to the baggage and stress they can bring to your life. Try a little non-traditional thinking and you can truly be credit card debt-free forever.
If you need an accountability partner or have questions, reach out to me. My mission is to help Americans live a better life and I’d like to see you succeed at a debt-free life.