Too many Americans not only rely on credit cards as a financial tool, but also as a way of life – often relying on credit cards to make a living and accumulate heavy credit card debts in exchange for money.
This is a problem because credit card debt can easily become the most common form of consumer financial debt. According to Experian, 60% of Americans use credit cards and the average credit card debt is $6,194. Overall, U.S. financial consumers hold $629 billion in credit cards in 2019. According to Experian, it has increased by US$129 billion since 2009.
Jeff Rose, the founder of the online wealth management platform Good Financial Cents, said: “People usually use credit cards as an extension of salary.” “Unfortunately, this is an easy way to increase debt.”
Cut the card line
What is the best way to get rid of the credit card lifestyle? Rose said there were no magic bullets. This requires hard work and discipline, but for Americans who rely on cards, this is a way forward.
The first step is to establish some short-term financial relief, which is where zero-coupon credit cards or low-interest personal loans can help. Use free online tools to find the right credit card for your financial situation/
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Rose said: “Try to transfer your credit card debt to a zero or low interest debt option.” “This will help save interest expenses while paying off credit card debt. As an additional bonus, depending on the card you transfer to, you You can even get some free points for travel or other forms of credit card rewards.”
Cardholders seeking other forms of debt consolidation can use personal loans as long as their interest rates are lower than those of other debt.
Ross said: “Combining all credit card debts into a personal loan can quickly eliminate credit card debts, especially when the user only makes the minimum repayment.” “When the cardholder can only pay the minimum fee, Debt may last for several years. However, a consolidated loan with a lower interest rate can direct payment to repay the actual principal balance of the credit card, not just the interest on the credit card.”
Card users can search for multiple personal loan options on financial comparison sites (such as Credible), and these sites can directly access low interest rate loan options.
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Take long-term measures to curb the lifestyle of credit cards
Financial experts say that once the cardholder has stopped losing money, it should take some long-term measures to permanently reduce credit card debt. Try these tips to reduce your dependence on credit cards as a financial lifestyle.
The best way to stop overdependence is to go to turkey.
Beverly Miller, founder of the money management website Money Coach Bev, said: “This requires having a good family budget, that is, knowing how much money to spend each month, planning expenditures and following the plan.” “The first The hardest month is because you have to pay credit card bills, pay cash or use a debit card to make the current purchase, instead of using a credit card. But after the first month, using the budget will become much easier, especially if your credit card If there is no balance on it.”
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When repaying credit card debt, living below your ability
Carrying any kind of balance on a credit card indicates that the expenditure is out of control, usually due to lack of attention and budget. Miller said: “When you live your life and have plans and goals to achieve long-term goals, your focus will shift.” “Soon, those goods that you are eager to pay by credit card suddenly become less important. .”
Make non-credit card use your lifestyle
“The best way to curb credit card use is to take all credit cards, seal them in an envelope, and write “Financial Freedom!” Mike Earl, a Fortune Group certified financial planner in Eden Prairie, Minnesota, said, “Then hide that envelope somewhere in the house. “The main reason why people have difficulty getting rid of credit card debt is because they continue to make new purchases on credit cards. So this is a step forward and two steps back.”
Piaget suggested to try not to use a credit card for a month, and use this as a motivation.
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He said, “When I did this for the first time in my life about 10 years ago, it was such a huge feeling that I could not get credit.” “All I have is a debit card and cash in my wallet. This Brings greater freedom.”
“In addition, I quickly paid off my credit card and started saving more money every month-and completely got rid of the lifestyle of relying on credit cards.