Have you reached the limits of your credit cards? Here’s what you can do!

Related imageFor many, obtaining a new credit card marks a transition from adolescence to adulthood. Having the ability to buy what you want and pay later can be exciting and give you a sense of autonomy. It’s easy, though, that this new buying tool can trap you. You spend money that you do not have, and before long you are at your limit. You apply for a new card and the process is repeated; it is not long for you to find yourself in a difficult financial situation.

Getting rid of such a debt will require sacrifices and will take preparation, planning and commitment on your part. When you succeed, however, you will have established good habits that will help you throughout your financial life.

The following strategies will help you overcome the challenge:

Do not spend more on your cards

You can not continue to borrow to get out of your situation. You no longer need to apply for new credit cards. You must also stop using your existing cards. Some even go so far as to put a literal freeze on accounts by immersing their cards in a jar of water in the freezer, a question they can not be used capriciously.

Prepare a budget

If your cards are at their limits it is often because you have lived beyond your means and you must prepare a budget. Calculate your essential expenses: your accommodation, service accounts, insurance, transportation and groceries. You must exclude from your budget anything that is not necessary, such as outings and dinners at the restaurant. Your budget should not include more than what is needed and your debt payments. (Click here for more budget tips)

Once you have created your basic budget, you can afford to add, if your income allows, occasional outings. By having a budget to entertain you, you will be more likely to join!

Increase your income

If you have an expenditure problem, it is possible to reduce the sacrifices needed for your budget by finding a part-time job. Or, if you have valuables that you no longer use, you can arrange a garage sale or online auction. You can also keep the children of a friend or loved one. Be creative and use your talents!

In addition to finding new sources of income, it is important to start saving. Try renegotiating some of your monthly expenses, such as your insurance or telecom plan. Take advantage of flyers and coupons to lower your grocery bill. Find ways to save money and you may even find your budget without having to supplement your income!

Open a savings account

You are looking to reduce your credit card debt, so the idea of ​​putting a sum aside savings account seems a little paradoxical. However, life is full of surprises and a savings account that you contribute to on a regular basis allows you to better absorb the unexpected costs of everyday life without having to borrow.

Contact your creditors

Talk to your creditors. If your payments are too high and you are concerned that you may not be able to meet your obligations, it is important that you call the card issuer and negotiate new payment terms. It is possible, by negotiating, to find you with a more favorable interest rate or a payment route that better meets your ability to pay.

Creditors, especially credit cards are used to situations like yours and they will do their best to help you. Yes, they want to recover their capital, but they know that the best way to accomplish this goal is to help you find a way to pay within your means. Just like you, they do not want to see you fail at your payments: a loss of money does not interest them.

Develop a debt payment strategy

You must now attack your balances. You can do it in many different ways: some prefer to pay the lowest balance first and see results faster, while others prefer to save by paying the balance with the highest rate first. There is no magic recipe, but if you manage to pay a full balance, it is important to take the money you have spent on this account and start paying your other debts. By honoring this commitment, you will be able to get rid of your debt before it leads to more serious difficulties.

It is difficult to live with a large debt. Your accounts are certainly a source of constant stress in your life. By applying these strategies however, you will be able to succeed without this overwhelming debt. Once you have reached your goal, you will have the habit of saving and keeping a budget. This will even save you money in a serious way and maybe even invest and better prepare your financial future.