Do you dread getting those credit card statements in the mail? Sometimes it seems that with the interest accruing there is no way to make headway on the balance. It's so easy to use credit, and paying it off is so hard. We have all been there, to some degree. It can be debilitating.
Given the difficulty, throwing up your hands is not the answer. The emotional toll of debt means that perhaps the answer may also lie in our emotions, and not just in math. If you are just covering your expenses, how can you possibly pay off this large and growing balance?
There is no easy answer.
However, there are some strategies which may help on the emotional side, so we feel encouraged rather than hopeless. Here are some ideas:
1. Pay off the smallest first. If you list all the debt you have on a piece of paper or spreadsheet, it would help to cross off as many as you can. This is the same feeling you get from crossing off items on the To Do list. However, the fallacy is that the crossed-off items may not be the most important. But the encouragement from seeing some progresss may be worth it.
2. Pay off the highest interest balances first. This makes sense mathematically, because the higher interest rates are really where the total debt can quickly increase.
3. Use a debt consolidation company. This means that all the various credit card debt will be rolled into one payment. The hope is that the new payment will have a lower interest rate. this method does not change the total amount due.
4. The last method is the hardest but the most effective. It's a combination of increasing income or reducing expenses plus a change in behavior. The first three options are commonly used, but they don't address the issue that caused the debt in the first place. This fourth option is slow and hard, but it involves the chance for life change.
5. Debt negotiation and bankruptcy - we won't talk about these here, but these two options are on the table for some people.
You may have guessed already, but the slow and hard way may be the best way.
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