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5 Ways to Reduce Credit Card Debt

Credit card debt can be stressful. Not only can it keep you from achieving personal and business goals, but its stressful influence can even lead to anxiety and depression.

According to Equifax Canada, the average Canadian carries almost $24k in non-mortgage debt (this includes credit cards, loans and other lines of credit). That number is enough to make anyone stressed!

But no matter how much debt you’re carrying, there are solutions to help you reduce it. With these tools and some smart thinking, you can chip away at your credit card debt, cultivate a more financially stable environment, and even accomplish the goals that debt may have been keeping you from.

Let’s get started!

Plan for Payments in Your Budget

You most likely already have a monthly budget, but if not, now’s the time to start one.

A budget not only keeps your spending on track and helps you pay your bills on time, but it also can be the key to helping you discover where you can cut back to funnel more funds into credit card repayment.

Using a budgeting app or other software will help you break down where all your money is currently going, and help you sort it into categories like bills, entertainment, food, gas, and so on. From there, you can identify points where you can save money.

That subscription you haven’t used in two months? Unsubscribe. That car insurance payment that you’re pretty sure is too high? Shop around for better rates. Then, once you’ve trimmed the fat, so to speak, direct all that savings straight into your credit card debt. You’ll be surprised how even that little bit of extra savings each month can go a long way toward making a dent in your debt!

Focus on One Card at a Time

Multiple credit cards weighing you down? No need to feel overwhelmed. By concentrating on paying off one card at a time, you can minimize stress while still making progress.

Some suggest paying off the card with the lowest balance first, since it’s a quicker, more achievable goal and will give you momentum and encouragement for tackling the rest of your debt.

Make sure you’re still making minimum payments on all your other cards so you don’t fall behind, but redirect any extra money into paying down the principle on your lowest-balance card. Then, once it’s all paid off, you can take the money you would have spent on that card and funnel it into your next card, and so forth.

It may take time to get all your cards paid down, but this slow-and-steady method is a proven way to make progress on chipping away at your credit card debt.

Consider a Balance Transfer

Why make multiple payments every month when you can make one big payment that goes toward your entire debt?

By transferring your current credit card balances onto one low-APR credit card, you not only lower your monthly payments overall, but you also lower the amount of interest you pay month to month. This is what’s known as a balance transfer.

A balance transfer can help you pay off debt faster and pay less overall, but keep in mind that most credit card companies require you to have decent credit to obtain a balance transfer card.

Discuss a Debt Settlement

If you’re really in a bind and don’t have anything extra to put toward your credit cards every month, you may be able to work with your lenders on a debt settlement.

This option is often considered a last resort because it negatively impacts your credit which can take a long time to rebuild. However, it can be a good option if you simply cannot afford to make payments anymore or have missed so many payments that you’re being contacted by debt collectors.

In a debt settlement, you negotiate with your creditors to see if they’ll accept less than what you owe for full payment. You can either do the negotiation on your own or go to a third party and have them negotiate on your behalf. However, keep in mind that a third party will charge fees for debt settlement.

Turn to 310-LOAN When Credit Cards Aren’t an Option

310-LOAN offers payday loans and cash advances specifically to help you get access to the cash you need. With our flexible lending options and our easy online application process, you can be on track to get your cash in the matter of minutes. Contact us today to see what kind of online payday loan or cash advance you qualify for, and set yourself up for financial success.
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