Thousands before you have paved the way to debt-free living, and you could be next. Here are the first steps to getting out of credit card debt.

Date:   5/11/2021 7:28:44 PM ( 3 y ago)

The average person in the US owes thousands upon thousands of dollars to credit card companies, making credit card debt a way of life for most Americans. A bunch of debt means high payments, and a ton of stress on families.

If you've gotten yourself into a bad situation by racking up debt and can't see the way out, you need to know that hope is out there! Thousands before you have paved the way to debt-free living, and you could be next. Here are the first steps to getting out of credit card debt:

1. Check Your Credit Report

The first step in assessing your finances is to check your credit report. A quick google search will give you multiple agencies that will run your credit report for free, giving you a better picture of your credit history and accounts. Don't let the report overwhelm you, but do make sure to check for any problems.

If inaccurate information exists, start by calling the individual creditor itself, as they are often able to resolve the issue more quickly than the credit report agencies. Be sure to check where you stand with each individual credit account, addressing any late payments that need to be brought up to date or inconsistencies with your credit history. 

2. Consolidate Your Debt

If working with each credit card company is overwhelming, then it might be worth checking into a debt consolidation agency. These agencies exist to help you negotiate your debt into one manageable payment per month, and can be super helpful. 

3. Make a Budget

Next up, it's time to make a budget. Having a more accurate picture of where your money goes is key in finding extra dollars to begin paying down your debt. Start by noting necessary expenses like housing, utilities, and transportation costs. Continue to track every dollar that exits your bank account, including eating out, gifts, and extracurricular activities. This will help you begin to better understand where your hard-earned cash is being spent.  

4. Reduce Expenses

Now that you know exactly where your money is going, you can work to reduce your expenses. From cutting out television subscriptions to getting cheap car insurance, there are lots of ways to begin finding extra money in your budget to go towards your debt. Perhaps you can look into eating out less or making your coffee at home instead of grabbing a Starbucks drink every day on your way to work. Maybe you can do your clothes shopping at a second-hand store to save money on clothing purchases. In this category, every little bit helps, as it's often the little things that add up big.

In addition to assessing all of the little unnecessary expenditures in your budget, you can even look to reduce your "necessary" expenses. Perhaps getting a roommate would help decrease the amount you pay in rent each month. Maybe switching cell phone carriers would save you some cash. Again, any amount helps when trying to cut expenses. 

5. Pay Down Your Debt

Now that you've reduced expenses, it's time to start putting every extra dollar that you earn towards paying down your principal balances on your credit cards. Some people recommend using a debt-snowball as you get started. In this method, you choose the account with the smallest balance to tackle first, simply paying the minimum payment on all other cards. Once the account with the smallest balance is paid off, you can move toward paying larger and larger amounts off on the higher balances.

Credit card debt can be overwhelming, but it doesn't have to hold you hostage for the rest of your life. Financial problems can be solved quite simply, but it will take some time and effort to get to a place of financial freedom. Don't lose hope; it is possible to regain control of your budget so that you can spend your money on what's most important and get rid of the stress of financial uncertainty.

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URL:   http://www.curezone.org/blogs/fm.asp?i=2439781

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