Make a plan to address credit card bill balances

On Behalf of | Jan 4, 2018 | blog |

The end of each year is a rough time for many people who use credit cards to cover holiday expenses. This means that throughout the following year, they are left to try to pay off those debts so that they can charge things on the cards for the upcoming holiday season.

No matter what balances you have on your credit cards, you can make plans to get the balances paid down. The first thing that you need to do is to sit down and figure out what you are facing. This might not be a fun task, but it can help you along the way.

Taking a look at the big picture

You must write out all your credit accounts and balances. Make notes with the due dates, minimum payment amounts, and interest rate on each one. You might do this in a notebook or on a spreadsheet. Make sure your chosen method is easy to implement and that you will stick to it for the long term.

Setting up a plan to pay off the balances

Decide how you are going to start paying down the balances on these cards. You need to pay off more than the minimum amount each month if you are going to make headway. If possible, you might consider transferring balances to a card with a lower interest rate. This could lessen fees as you pay down the balances. It can also help you focus your efforts on a larger portion of the debt. Once you pay off one account, move the money you would have spent on that account to another so that you can start paying off other accounts faster. The first accounts you try to pay off should be those with the highest interest rates, lowest balance or highest balance, depending on what will keep you motivated.

Making extra payments

As you save money in other areas of your life, you can put that money toward paying credit accounts. For example, if you earn extra money on a freelance job or side gig, you can make a payment on a credit account with that money. If you opt to stay home and watch a movie instead of going to the theater to watch one, you can put the amount you saved toward a credit card bill.

Exploring other options

If your credit accounts are too great for you to overcome, you might consider filing for bankruptcy. This could provide you with the financial relief you need to start fresh with your finances after the process is complete. Consumers can file either Chapter 7 or Chapter 13, depending on their circumstances.