Financial expert Ethan Ewing of Bills.com offers seven tips for paying off credit card debt – these budgeting tips will help you achieve your financial goals in money management quickly and easily!
“The good news about our nation’s current economic challenges is that they have inspired many Americans to clean up their personal finances,” says Ethan Ewing, president of Bills.com. “Now’s the time to make a fresh start.”
To learn more about paying off credit card debt, click on Escaping Credit Card Debt Today by Inc. Media Masters. And, read on for Ewing’s advice on paying off your debt.
7 Tips for Paying Off Credit Card Debt
1. Stop charging up your credit cards! Commit to living without credit cards for a period, even if only a month. “Imagine that your credit card is another checking account that you must balance monthly, and that overspending will cause you to go into overdraft – which, after all, is what debt amounts to,” Ewing says. To help pay off your credit card debts, withdraw cash for the week or month, or use a checkbook or debit card to make purchases. Read Should You Close Old Credit Card Accounts? for more info.
2. Live under budget. Know exactly what you earn each month, and then spend less. “Take responsibility for where your money goes, rather than allowing whims, advertising, habits or peer pressure to influence spending,” Ewing suggested. Basic budgeting templates can be found online, such as the free guide Bills.com offers, or in any number of personal finance books.
3. Commit to savings first. Often, people find saving easier when they take advantage of direct deposit or automatic transfer to a savings account. “Consider savings a ‘bill’ that must be paid, even if it is as little as $1 per day,” Ewing said. To help pay off your credit card debts, create and stick to a financial budget.
4. Plan ahead. Look to the future and think about upcoming large expenses, such as tuition, a lump insurance premium, a major car repair or holiday giving. Divide the annual expense by 12 and plan to save 1/12th of the total each month. Some people manage these savings through a financial software program or a ledger; others set up individual savings accounts for each goal. To help pay off your credit card debts, consider arranging automatic transfers each month.
5. Be on time with your payments. Pay bills or credit card debts with checks or set up automatic payment plans to eliminate worries about a late or forgotten payment.
6. Pay off credit cards with high interest rates. If you cannot pay all of your debts down in a short period of time, then prioritize. Make minimum payments on credit cards with the lowest interest rates, and put all available funds to the card with the highest interest rate. Once that is paid off, put excess cash to the card with the second-highest rate, and so on until you are debt-free.
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7. Be prepared with insurance. In addition to savings, review insurance coverage to protect yourself from eventualities. Look into appropriate coverage, such as health insurance, homeowner’s or renter’s insurance, car insurance, disability insurance, life insurance and long-term care insurance, as appropriate. Review your annually, or request a coverage review with an insurance agent, to ensure you have the proper coverage.
Bills.com is a free one-stop portal where consumers can educate themselves about complex personal finance issues, including credit cards, debt relief assistance, insurance, mortgages, and other loans.
Do you have any tips for paying off credit card debt – or avoiding it in the first place? Comment below – I’d love to hear from you!