Do you experience nightmares over the rest of your credit card?
Do you only make the minimum payments until “extra” cash appears?
Is your card limit just not enough to keep up with your costs and is it already exhausted?
If you answered yes or even one of these questions, you probably can not afford your credit card debt.
You will be fine. Read on for my best tips on how to get out of debt when you really can not afford it.
Face it, do not dwell on it
You will have little value in beating yourself up for the financial mistakes you have made in the past. We have all made them. Acknowledge that you have a debt problem and then move on. It’s time to take action to rectify the situation. Once you start making progress in the balances, you will find that your attitudes and thoughts about money will start to change in a positive way. You will even begin to question your values, the relationships in your life and how you spend money within your budget (and yes, you should have a budget!). Is this a good thing? time for reflection.
Consolidation at a lower interest rate
Your first move is to see if you can consolidate all your credit card balances into one loan or one with a lower interest rate. This will reduce the cost of interest you pay each month, which means that most of your payments will go to the rest of the capital instead of interest. Consolidation loans can be difficult to qualify for, so if you are rejected on your first application, do not worry. Take the next six months to make progress on the rest, and then try to re-integrate. Do not keep applying though. this will negatively affect your credit score.
Some people turn to family members to help pay off their debt balances. This may be a good choice, but just be clear with anyone who helps you about any strings attached and write a contract. I once mediated between father and son because of such a family loan and it completely broke up their relationship.
Pay extra for the higher interest balance
Multiple balances? Start paying an extra piece each week for the higher interest rate balance. This could mean giving up the takeout to apply an extra $ 25 a week to the 21 percent interest rate card. Just a few extra dollars weekly It is also called the snowball repayment method. It begins to generate significant momentum as the snowball rolls down the hill. In other words, you’ll actually see the balance decrease much faster after a few weeks of doing so. Once the balance is repaid at the highest interest rate, apply this method to the next higher interest rate and so on. The good news is that the next card will pay off even faster because you will have money from the previous card payments, as well as this extra weekly money you can put in it. Repeat this until all the rest is paid off. You will start to see your credit score go up in about 90 days.
Sell things to pay for the balance (s)
Do you have an extra Nintendo hitting? A Sea-Doo? A snow blower? Designer bags? It’s time to post all these things for sale online (Kijiji, Facebook Marketplace, eBay etc.). If you have overdone the purchase of your car or signed a lease for a place that you really can not afford, you may need to reduce these larger items as well. Put all the revenue in the balance of your highest interest rate.
Listen, I know this option may bother you, but take comfort in knowing that financial tranquility will make you feel better than Any of these short-term sacrifices you will make. The positive psychology of money proves that this is true.
Earn more money
If you have the opportunity to take on extra shifts, work a few more hourly shifts, make friends, now is the time. If this is a promotion, promotion or job change, go ahead. Any extra money you can earn – including tax refunds and bonuses – is all you owe. And if someone owes you money, now is the time to apply for this loan and put it on your credit cards.
If you just can not continue
If you have tried all of these options and have worked hard for at least 90 days and are still unable to meet your payment obligations, you may need to start working with an authorized insolvency administrator who can help you prepare a proposal. consumer. This is a process where an agreement is made between the various lenders to whom you have to repay something, but often not everything, and at a lower interest rate. The disadvantage of this strategy is that your credit score will be negatively affected. However, it is not as serious an impact as filing for bankruptcy, which should be a last resort.
Changing your money history and paying off your credit card debt takes time and hard work, so do not give up. If you need support, turn to a financial advisor to help you work on a budget and better financial behavior. You have this!
And no matter what you do, do not take on more debt when you repay your existing debts. will only perpetuate the cycle.