Many people are struggling with credit card debt today, and it can be hard to know what the best option is for getting out of it. There are many individuals and companies advertising different options including:
Getting a debt consolidation loan
Hiring a debt management company
The biggest problem with these options is that they cost you more money, and the last one damages your credit score.
Your next option is to make an effective DIY (Do It Yourself) System.
This system does not cost you any money, but weather it is successful or not is entirely dependent on you.
The first thing you must do is stop using your credit cards. If you are trying to reduce your credit card debt then you don’t want to be adding to that debt by making more purchases with your credit cards.
It is vital that you get a copy of your credit report and resolve any mistake immediately.
Now create a budget and stick to it. Make sure you allow enough money for rent/mortgage, utilities, food, car payment, phone, minimum credit card payments, and other bills.
After you have created your budget, start looking for ways to save money.
If you are spending money every month on things that you don’t have to have to survive such as cable, then you may want to cancel it for now or at least cancel some of the extras like movie packages. The money that you save can be applied to your credit card bills.
You can also save money on food by using coupons and doing comparison shopping. I am a cashier. I have seen people’s grocery bill cut in half using these methods.
You can save money on your utilities by turning lights off when no one is in the room. Also by taking shorter showers and turning the water off while you’re brushing your teeth.
You can also save money by bargain hunting.
You can save a lot of money and get good stuff at yard sales, flea markets, and thrift stores. Many times you can get name brand clothes that are like new for $5 or less!
Now take all of the money that you have saved this month and put it with the money that you have set aside for the minimum payment on your credit card that has the lowest balance. Send all of this money to that one credit card and pay your minimum payments on your other credit cards.
Continue doing this until that credit card is paid off. Then take all of that money and pay off the next credit card that has the lowest balance.
This is called the “Snowball” effect. Keep using this method until all of your credit cards are paid off.
It may take some time, but by using this plan you will end up free from all that debt, and stop all those annoying phone calls and threatening g letters.