Can you set a goal to eliminate all your debts within 3 years time? You may think that it is incredible. However, it can be done if you take proper approach in a serious manner. Here are 3 essential tips you should apply:
Tip 1: Pay off your high interest credit card first
In general, most of the card users are suffering from high interest rates. If you have multiple cards with you, you are reminded to set your priority by paying off those high interest debts. If you have limited income every month, work out a budget plan to make more payment to these accounts. For other lower interest accounts, you are advised to make minimum payment only. Clear off the outstanding with high finance charges so that you are able to save some cost.
Tip 2: Pay off those cards with lesser balances
It is indeed a good idea if you can pay off your debt according to a proper sequence. Start paying off those cards with lesser outstanding balances. By doing so, your debt will become more manageable. You can either close the account or leave it opened with zero balance. However, this tip doesn't apply if all of your cards have exceeded the credit limit.
Tip 3: Stop using your card
Your overall debt elimination plan will not be successful if you don't apply this final tip. All your hard efforts will become useless if you keep swiping your cards monthly. You will never become debt free because you keep creating new debts from time to time. If you can't control your spending habit, you will be accumulating more debt in the future. Hence, in order to avoid this, destroying your cards will be a wise step.
Don't feel bad if you have to give up your cards. Always bear in mind that having zero balance on your monthly statements will be the best.