We just covered the two main strategies for getting out of credit card debt, so now let’s talk about tactics. Unfortunately, here, I’m speaking from experience. I can spend money as easily as pouring out water. In my 20s, I racked up some impressive credit card and student debt. Those years are behind me, but I learned from them that 1) tackling credit card debt is hard and 2) sometimes, you need to get extreme about it. Here are some pro tips!
Key Takeaways
- From freezing your credit card (literally) to memorizing your debit card number, we offer some hacks to help your credit.
- Once you have picked a strategy to pay down your debt, the most important thing is to stick with it. NOT that it’s a perfect strategy.
- Don’t be afraid to have a tough conversation with friends or family and honor your financial goals.
Cut Up Your Credit Cards
There’s no point and adding to your balance as you’re trying to pay it down. Cut up all but one emergency card that has some available balance. If you feel some grief or anxiety about cutting up your cards, that’s a pretty good indication you need to do it! Take a walk and reflect on why it’s so hard.
Freeze Your Emergency Card In Ice In Your Freezer
Don’t worry, you can defrost it in an emergency. Just use a little dish of tupperware, and leave it in there to chill. I felt like a child when I resorted to this, but it works. There’s no shame in taking an approach that makes a positive impact on your wealth.
Memorize Your Debit Card Instead Of A Credit Card
In fact, you can ask the bank to reissue your credit card with a new number. That way, you can’t just pull it out of your head when you find something cute on Instagram. I have one card number memorized. I use it for all internet purchases, and pay it off completely every month. This is also safer – only one place to monitor for suspicious transactions.
Always Pay Your Minimum Balance. For Every Card. Every Month.
Set it up on autodraft for the day after you get paid. Regular payments keep your debt from growing, and protect your credit score. Unless you are in a crisis and need to go into forbearance, always make that minimum payment.
Make Incremental Payments Against Your Principal
Even if it’s once a quarter or if you get a bonus check or just have a little extra at the end of the month – every dime helps!. Extra payments can really speed your path to payoff. We do this quarterly with mortgage payments, and I find it super satisfying to write that check. That’s money they can’t charge me interest on anymore. Take that, credit card companies!
Don’t Kid Yourself That Holding On To Debt Improves Your Taxes Or Your Credit Score
There are other ways to boost your credit score. The interest you pay on the balance is far more harmful than the tax or credit benefits.
Be aware of your credit score and the impact each of your financial decisions has on your credit score. Check here for common credit score misconceptions.
Take A Spending Break
Just try not to spend any money beyond your basic needs for a month and notice your emotional reaction. Recently, my quaranshopping had gotten silly, so I took a break. I thought it would be torture, but it was actually restful. It can be really Illuminating to see what really calls to you – and how silly some of it is.
Just Say No
One of the hardest moments in my financial life was telling a friend I flat out couldn’t afford his birthday festivities. His plan was cool, but it was $75 I didn’t have. His circle of buddies all made 2-3x what I did. Telling him was embarrassing and our friendship was rocky for a sec, because he was hurt. 17 years later, we’re still close. Real friends are the people who support you in meeting your goals, and will take hangover pancakes as a birthday gift. Don’t be afraid to have a tough conversation and honor your goals.
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