How to break the plastic habit and get out of debt?
How to break the plastic habit, and get out of debt? Plastic, or credit cards is one way that many Americans have found to get themselves in over their head in debt. The illusion of grandure that credit cards casts on the minds of the young and old is dangerously appealing.
So what is it that a person would have to do in order to get out of the habit of using a credit card. Well, it really comes down to if you want to stop using the plastic, or not. Though, there are some tips you can follow that will make it easier to use your income for life, and pay off the credit cards. It will however take discipline.
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Tip #1
Start out by putting all of your credit cards away. If keeping one out for emergencies makes you feel more comfortable that keep one out. Though, it will be first nature to grab that card when ever you make a purchase. You will want to avoid this. That is unless you are using that one card to make purchases and then are immediately paying off those charges. Simply like a revolving account.
Tip #2
Pay off one card at a time. This will make it easier to get out of debt. The reason is that you will be paying interest on less amounts of money. See this is how that works. If you have three cards with 15% interest on each card, and each card has a balance of $1000. Then you are paying $150 for each card, and then times that by three, you are paying $450 for each card. However if you pay off one card at $1000 then you will be saving $150 for that card in interest.
Tip #3
In order to get out of debt and stay off of plastic, it will take a budget that works to do this. You will need to budget enough to live off of, and also enough to start paying down that credit card debt. The minimum payments simply will not do this. You will need to make sure that the budget you create is flexible enough that if there is an unexpected debt or emergency, you will not be turning back to your credit cards to cover it.
Tip #4
If you are determined to get rid of your credit cards when you have paid them off. The best way to do this is closing one credit card account every couple months. It can be almost as damaging to your credit to close the accounts as if you do not make your payments. If the cards are paid off, then close one of the accounts at a time. This way you still show a credit pattern that is positive. The best thing to do is not get so many card accounts in the beginning.
Following these tips should make it easier to get away from that plastic habit of life and move towards a debt free living. Though, it will take your will power to get it all going and to be consistent in your decisions.
Because if you choose to fall back and use your credit cards for purchases, it will be like starting all over again. The best thing to do is simply not start living day by day with plastic. Because this is where it all starts.
