The Path to Debt-Free Living: How to Overcome Credit Card Debt

THIS POST MAY CONTAIN AFFILIATE LINKS. PLEASE SEE MY DISCLOSURES. FOR MORE INFORMATION.

Do you have a tough time navigating past all those pesky credit card debts?

Many people do as they struggle to make the minimum payments and accumulate more debt over time, which can be demotivating. But don’t give up just yet!

Achieving debt-free living is possible with proper planning and dedication; it’s not an impossible task.

In this article, I will walk you through some simple steps that lay out a clear path towards reducing your credit card debt so that you can regain financial freedom and peace of mind.

Read on to discover how to create a budget, implement payment strategies, and ultimately break free from your current debt burden!

#1. Don’t Save Cards On Apps 

There are a ton of apps that make it more convenient for you to shop by allowing you to save payment information.

However, this is how those with a shopping addiction end up spending more and more money and plunging themselves into debt. 

If you have any apps you have a card saved on, delete that payment information. If you have a digital version of your card on your phone, delete that too. 

It makes spending much more challenging and gives you more time to think about a purchase before you make it, so you don’t just press a button once you get to checkout. 

#2. Avoid Signing Up For Loyalty Cards

Loyalty cards can be great when the only thing they do is give you benefits in return for purchases. The problem? Many of today’s loyalty cards businesses offer aren’t these types of cards. 

They’re often credit cards in disguise. If you’re not careful and you sign up for too many, you end up running the risk of going way over budget and having to try to consolidate your debt so that you’re able to take care of it. 

A few cards here and there aren’t a problem, but you shouldn’t sign up for every loyalty card under the sun. 

#3. Never Spend More Than You Can Afford To

Many people who are new to credit cards view them as free cash. The reality? A credit card is just a loan. 

You are required to pay back however much you spend the month after. Overspending can lead to you paying back a ton of money at a time. 

If you’re unable to, you start accumulating debt, which starts growing even larger every month you don’t take care of it. 

The first lesson? Never spend more than you’re capable of. Don’t use your credit card if you can’t pay off something with cash. 

#4. Pay It Off In Full Every Month

Some people are comfortable carrying a balance and might be able to do that responsibly. Others, however, aren’t. 

The best way to avoid credit card debt is to pay off the entire balance every month. This shouldn’t be too difficult, as one good rule of thumb is to keep your credit utilization below 10% (even though 30% is the absolute maximum). 

You don’t have to pay any interest when you pay it off in full, which can sneak up on you if you’re not careful. Keep this in mind every time you use your credit card!

#5. Never Max Out Your Cards

Maxing out your cards is the worst thing you can do. Not only will it cause your credit to take a hit, but those with much larger credit limits can find themselves on the hook for massive bills. 

If you have multiple cards, that’s even more debt you must tackle over a very short period. 

This ties in to never spending more than you can afford, but it’s a reminder that maxing out your cards has more consequences than those it imposes on your finances. 

#6. Track Your Spending Closely

The biggest lesson you need to know about using credit cards is budgeting. You have to budget and monitor your spending so that you never go over and spend money you don’t have. 

One budgeting method people use is to write everything down and keep it in plain sight. 

But if this sounds like too much work, you can always use a budgeting app that will help you track your finances and send you alerts if you’re ever at risk of spending more than you’re supposed to. 

You’ll even find that some apps may help you find credit cards with much more favorable terms. 

#7. Create A Plan Of Action If You Do End Up In Debt

If you are in debt, you must immediately nip it in the bud.

This means sitting down, creating a new budget with room for paying back debt, coming up with a strategy to help you pay back debt immediately, and establishing other goals and milestones designed to make the process the least stressful on you as possible. 

You should also develop ways to boost your income so you can still manage other areas of your life. 

The sooner you work on your debt, the better your outcome. 

#8. Transfer Money Over Immediately

One strategy that someone uses is transferring money over to their credit card account immediately after they make a purchase. Granted, this may not be something that everyone would want to use. 

However, it could work for some people. After all, you physically move the money out of your checking account and see how much you still have left over. 

For those with a spending problem that could get them into debt, this can make you think twice about spending so much money when you see how much you have in your bank account. 

#9. Have An Emergency Fund

Saving is such an essential activity that very few people engage in. Your credit card debt is just one area of your life. 

Unfortunately, adulthood means juggling multiple financial responsibilities at once. If something happens to your income or an emergency arises, you may not have enough to take care of your credit card debt. 

This is why it’s essential to start building an emergency fund immediately. This gives you enough cash to deal with a major life development so you don’t fall behind on things like your credit card payments. 

Granted, there can be major situations that cause issues anyway. However, it’s better to have a bit of savings than none. 

#10. Brush Up On Your Financial Education

It’s never too late to become more financially educated. The more you know about your finances and what you should be doing, the better you can easily navigate your finances. 

You can easily start by learning more about managing credit cards. Plenty of books, podcasts, blogs, mentors, and even movies and documentaries are willing to give you what you need to succeed in your financial life. 

It can be daunting initially, but you’ll become more confident about money over time!

Warning Signs Your Debt is Out of Control

Do you know the warning signs that your debt is out of control?

Here is a list to review and if any describe you, it is time to start taking your debt seriously.

WARNING SIGNS YOUR DEBT IS OUT OF CONTROL

Debt Snowball

If you are in debt, getting out can be a real struggle.

Luckily, there is the debt snowball method.

This simple plan will help you get out of debt and stay motivated along the way.

DEBT SNOWBALL METHOD

How To Get Back On Your Feet

When financial setbacks happen, you have two options. You can either give in and accept a life of struggle and stress, or you can do something about it.

If you want to do something about it, here are the steps you need to take in order to get back on your feet.

HOW TO GET BACK ON YOUR FEET FINANCIALLY

Steps To Building Wealth

We all want to have enough money that our finances are no longer a stress in our lives.

But with so much financial advice out there, building wealth seems impossible. Not any more. Here are the simple steps you need to take.

STEPS TO BUILD WEALTH AND BECOME RICH

Legit Ways To Make $1,000 Fast

Are you in need of cash fast? There are many things you can do, but a lot of the ideas out there only allow for a limited income.

Here are over 25 great ways to make up to $1,000 in a short amount of time.

BEST WAYS TO MAKE $1,000 FAST

This thread inspired this article.