22 Jul Credit Card debt tips and alternatives

CNBC reports that about 55% of adults in the United States that have credit cards carry credit card balances.  Of them, 10% carry a balance of $5,000 or more!  They also state the average interest rate on those credit cards is more than 17%!  If you’re one of these people, it may seem like a struggle to alleviate your debts. Here are a few ways you can get out of credit card debt.

1. Stop using your credit cards until you pay them off.

   Interest rates of 15% or more can cause credit card balances to grow quickly. Start shrinking your balances by using cash or a debit card until your credit cards are paid off.  This will allow you to focus on paying down your balances.  Plus, you won’t be tempted to spend more than you can afford to pay.

2. Track your expenses and spend less than you earn.

   Tracking every dime you spend may seem like a daunting task. This will allow you to see where your money goes, where you can stop overspending and how you can pay more towards your debts.  Keep a spreadsheet of all expenses.  Through our online banking, we offer “MyMoney”, a tool that can help you track and manager your finances.  Save receipts and log your payments.  It will get easier as you get used to your new methods.

3. Cut out non-essential items until you get out of debt.

   You’ll probably have to make sacrifices, but the results will be so rewarding!  Direct as much money as possible toward your credit card balance(s).  If you have more than 1 card, pay your regular payments on all but one.  Choose the card with a small balance.  It will be the easiest to pay off and will leave you feeling proud and determined to tackle the rest.  Some ways to minimize expense include; cutting back on eating out, avoid going to concerts or the movies.  Instead of booking an expensive vacation stay close to home, or even consider a stay-cation!  If you have cable or satellite TV, you may be surprised how much you can save if you call and try to negotiate a better rate.  It can seem painful to cut the things you enjoy. Stay focused on your long-term goal and find creative and inexpensive ways to replace more costly non-essentials.

4. Look for ways to earn extra income.

   Consider getting a part-time job?  You may be able to find part-time weekend or evening work if you think you can juggle two jobs.  Or consider non-traditional activities that may offer more flexibility.

5. Take advantage of balance transfer offers.

Transferring your balances to receive a lower rate could be a great way to save on interest and pay more toward your debts.  It’s key to have self control and not add to your card balance(s)!  If you are able, pay the same amounts you were used to paying on all transferred card balances or more towards your new card.  More of your payment reduce your card balance when you are paying a reduced rate.   KEMBA offers an introductory balance transfer offer for new card members.  Learn more here.

6. Use the equity in your home.

If you’re a homeowner, you may have equity in your home that could be used to consolidate debts.  Combining all your debts into one payment can give you a more affordable minimum payment.  To get out of debt faster, you could continue to pay the combined total payments from all your consolidated bills.  As with the credit card balance transfer option, don’t use your credit cards and charge up more debts.  That will only make your situation more difficult.  Speak with a KEMBA Mortgage Representative to learn more about our Home Equity options or click here.

7. Speak with a credit counselor.

   KEMBA has certified financial counselors on staff! We work with our members to develop a budget, explore options for getting out of debt, and provide you with a customized plan.  Your counseling session is free, so you have nothing to lose.

8. Develop a plan, set goals and reward yourself.

   Set realistic dates for when you would like to pay off a bill.  Track your goals and keep them where you can see them each day, and work to meet those dates!  When you pay off a credit card or other bill, celebrate yourself with a small reward like your favorite dessert, dinner out or a night at the movies.

Once you’re able to get out of credit card debt, make sure you STAY out of credit card debt!  Remember, you’re not alone on your journey to becoming more financially fit.  Implementing these tips on an ongoing basis will help ensure that you enjoy a positive financial future.

Would you like to speak with a KEMBA certified financial counselor?  Call us at 317-351-5235 or click here to set up an appointment to go over your credit, make a plan and have us cheering you on!

All loans at KEMBA Credit Union are subject to credit approval and underwriting criteria.  For complete details, visit MyKEMBA.org or speak with a KEMBA Representative.  NMLS# 794595