The fact of the matter is that national credit card debt is higher than it’s ever been. On average, American credit card holders have a credit card balance of almost $6,500.
For some individuals, this amount of debt is manageable. For other individuals, it’s a pit of quicksand, ruining their credit scores and holding them back financially.
Wondering if you have too much credit card debt? Here are 5 warning signs to look for and a few solutions to help you dig your way out.
Signs of Too Much Credit Card Debt
There are several signs which indicate that you have too much debt. These signs run the gamut from the physical to the psychological, and everything in between.
1. You’re Borrowing Money to Pay Off Debt
It’s simple: if you’re borrowing money from your mom, dad, brother, sister, friend, or another close relative in order to pay your credit card bill, you have way too much debt. The same goes for if you’re taking out additional loans.
While borrowing money might be a good band-aid for relieving your debt, it is not a long-term solution. At some point, those whom you’ve borrowed from will no longer want to give you money. Instead, they’re going to want money from you, essentially increasing your debt liability.
2. You’re Financially Dependent on Your Credit Card
Do you rely on your credit card to help you scrape by every month? Are you using your credit card to buy groceries, gas, and other small items? If so, you’re likely accumulating too much debt.
Credit cards should be used for two types of payments: large payments and online payments. You shouldn’t be using your credit card on an everyday basis.
3. You Willfully Ignore Your Debt Burden
Do you find yourself doing everything in your power to forget about your debt? Is your debt causing you to drink alcohol or sleep excessively? If so, there’s a very likely chance that it’s too high.
In some cases, when individuals are drowning in debt, they decide to let it drown them. You should not let this happen. You need to be cognizant of your debt burden, and take action to fight against it.
4. You Can Only Make the Minimum Payment
Ideally, everything that you charge to your credit card will be paid off before the next statement cycle begins. While this isn’t always realistic, you should at least be able to pay off the vast majority of your charges.
If you can only afford to make the minimum payment on a monthly basis, your debt is far too high. Doing this over a long period of time will result in tons of interest compiling, increasing your debt burden substantially.
5. A Maxed Out Credit Card
You should never, under any circumstances, be maxing out your credit cards. If you have no available balance left on your card, you have far too much debt.
If you’ve reached this point, it’s of utmost importance that you establish a debt relief plan.
How to Pay Off Debt
Paying off debt isn’t easy. However, there are a number of strategies you can carry out to set yourself on the right track. Some of those strategies are as follows:
1. Contact Your Creditors
While you may think of your creditors as scary, dark figures who are doing everything in their power to hold you down, the truth of the matter is that your creditors are likely fairly reasonable individuals. If you’re trying to pay off debt, it’s highly recommended that you have a chat with them.
If you’ve consistently made minimum payments on your cards, and if you’re kind to your creditors during your chat, they might just knock your interest rates down a few percentage points. At the very least, it’s worth a try.
2. Make Two Payments Each Month
If you have the money available, it’s wise to make two payments on your credit card each and every month. Figure out how much you can pay off per month, and then divide that figure by two. The figure you get from this will be your twice-monthly payment.
By paying off your debt in this manner, you gradually, but successfully decrease the amount of interest which is allowed to compile. This will not make a huge, visible difference to you in the short-term, but it will result in you paying your debt off faster than if you had made only one payment a month.
3. Pay Off One Card at a Time
A big mistake people make when trying to pay off credit card debt is attempting to pay off all of their cards at once. These individuals contribute an even amount of money to each account each month, hoping to knock them down together.
If you have two or more credit card payments to make, you should instead prioritize the ones with the highest interest rates. By doing this, you reduce the amount of money you’ll need to spend in the long run. Note, however, that you need to make at least the minimum payment on all of your cards.
4. Budget Your Spending
It’s simple: to successfully pay off debt, you have to know what you’re working with. After all, you can’t spend money that you don’t have. For this reason, you need to establish a precise and organized budget.
By laying out how much you spend monthly on car payments, groceries, rent, and other necessities, you can get an idea of how much you can contribute to your debt on a monthly basis.
5. Record Your Progress
Paying off debt is a lot like losing weight; it’s a long, tedious process that can be emotionally discouraging. To keep your spirits up, it’s highly recommended that you record your progress.
Seeing how much debt you pay off every month can encourage you to keep going strong. Failing to record your progress can make you feel as if you’re spinning your tires, and can sometimes even lead to a crippling depression which prevents you from making payments.
Find More Tips for Paying Off Credit Card Debt
Are you dealing with deep credit card debt? Need further help paying it off? If so, our website can help you. Ask National Debt Relief has tons of information on debt relief, helping you to carefully plan and take serious action against your debt.
Take a look at one of our other articles now!