ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Things to Do to Get Yourself, Out of Credit Card Debt! How to Use Credit to Pay Off Your Debt?

Updated on August 17, 2016
Craan profile image

Sheila is a kids' author who worked on Wall Street managing money. She loves to share how you can easily increase your net worth too!

Getting out of debt is the most liberating experience that'll lift the burden of the world off of your shoulders. Living a debt-free life is the ultimate dream of every consumer! To pay with cash or charge a debit card to obtain the things you need and desire is paramount. Shopping is a grand luxury and you must forever shop responsibly.

It's best to shop with cash. For an alleged period of time you can transfer your high interest credit cards or debt loans to a Zero interest credit card when an offer miraculously comes to you in the mail.

Remember, to pay your transferred debt in the specific time period to avoid accrued interest charges. This is a smart way to beat the system when you have high interest store credit cards. However, it’s always smarter to shop with cash or a debit card.

Decide to Shop with Cash

When you shop with cash in your pocket, you'll typically spend less money, since you'll only spend the amount that is in your wallet! In lieu, of conveniently charging your purchases to a high-interest credit card that you must repay or partially pay with interest by the end of the month is wasteful. Shopping with cash gets rid of paying high interest rate credit cards for good.

If you are drowning in growing debt, you must get out of debt within the shortest possible time frame to avoid paying heaps of interest.

  • Pay your credit cards with the highest interest rate first.
  • Don't get use to buying stuff that is not needed.

The Temptation to Spend Extra Money Is Strong

Decide to not charge when you are shopping by using cash instead. You will naturally spend less money!
Decide to not charge when you are shopping by using cash instead. You will naturally spend less money! | Source

Set Up an Emergency Fund for Sticky Moments

One path to not ever to get into debt in the first place is to create a nest egg of emergency cash. This is cash saved in an available interest bearing savings account.

The rule of thumb is to have an emergency savings account that is capable of covering all your basic living expenses for a period of up to three months in case you, unfortunately, lose your job or suffer a crashing disability that temporarily takes you out of the labor force.

It's best to create an emergency fund before investing in a savings account.

Even If You Have Debt, You Should Still Have a Savings Account!

If you have not heard of emergency savings, and don't have an emergency fund working for you, you can start by periodically saving a part of your income into a savings account as you are paying down your high-interest credit card debt.

The sad talk about having a lot of unsecured debt is, as you make minimum payments every month, it takes a plethora of years to pay off your loan. Sadly, you'll spend thousands of wasteful dollars in interest charges, even when you stop making new purchases.

The optimal advice for getting out of credit debt in the shortest period of time is to cut your credit spending.

  • Decide not to make additional purchases on credit!
  • Most importantly, you must make double or triple payments towards your loan every month.
  • Remember, to ask your creditor to lower your interest rates too!
  • Call your creditors periodically to request a lower interest rate!

Your credit card company has specific time periods during the year when they're allowed to offer lower interest rates, usually in January or June.

Have You Used a Zero Interest Balance Transfer Credit Card to Pay Off Your High Interest Debt?

See results

Transfer Your Money to a Zero Interest Rate Credit Card

Just in case, your credit card company refuses to lower your interest rate, you can shop for another credit card that has a lower low-interest rate or a zero rate. Move your old credit debt to this new credit card, and cancel your old credit card right away. Do this after you have done your transfer! With a lower interest rate accumulating each month, you'll have an edge in which to pay off your debt faster.

You should actually only have one credit card anyway, and not have any high-interest store credit cards that charge nineteen to twenty-three percent interest per year or more.

When you're diligent in paying down your debt within the shortest time possible, your credit score or FICO score will increase. This increase in your credit score will catapult into lowering the basic payments for your car, home and life insurance policies. Since, the interest rate your creditor will offer you, will automatically be less. At this point you're no longer a high investment risk. This new-found savings can easily be transferred to your emergency fund for added security.

When you have three months of emergency savings saved, you'll be able to dip into this emergency fund when you need high-ticket items for your home, car or health care, instead of using a high-interest credit card.

At this point, you'll have achieved peace of mind and will no longer need to worry about having to conveniently use a credit card for purchases. When you take money out of your emergency fund, you must remember to replace the money you recently removed, so your emergency fund doesn't dwindle to nothing.

Money Grows on Hubs: Getting Out of Debt
Money Grows on Hubs: Getting Out of Debt | Source

Consolidate Your Debt to Pay It Off Faster

Credit Card Poll

How Long Do You Think It Will Take You To Pay Off Your Credit Card?

See results
Money Grows on Hubs
Money Grows on Hubs

© 2011 Sheila Craan


Submit a Comment

No comments yet.