Credit card debt is a massive problem for people in Canada and around the world. The problem is that it’s easy to go into debt, but very difficult to work your way out of it. You’re likely spending all your income keeping up with your daily needs, and now you need to pay interest every month. Spiraling into further debt is not uncommon.
The good news is that there are ways to reduce your credit card debt without taking on jobs that will only weigh you down further. Here is what you need to do.
Transfer your debt
One of the quickest ways to reduce your credit card debt is to transfer it to another credit card. Learn how to choose a balance transfer credit card and you’ll get to start on a clean slate. Essentially, another company takes on your debt, providing you the opportunity to start paying it off without worrying about interest for the first few months. You can even choose a credit card with lower interest rates.
It might sound too good to be true, but the truth is that credit card companies gain from owning your debt. As long as your credit history isn’t in dire straits, it is to their benefit.
Use a budgeting app
Budgeting is one of the easiest ways to start spending less money without changing your lifestyle. You get a clear idea of where you could cut down your spending and a view of any transactions that should not be there. Trouble is that budgeting is very frustrating for most people.
Nowadays you can simply use an app like Mint to budget for you. You just connect your bank accounts to it and the app categorizes your transactions for you. It shows you exactly where you’re spending your money and singles out transactions that look out of the ordinary. It also flags double transactions or other suspicious items.
This makes it really easy to figure out why you’re spending more than you can afford, and make small changes to get you within a budget that’s sustainable. You can start paying off your debt rather than adding to it.
Most people don’t have a clear idea of what their priorities are. You know there are certain things which are non-negotiable, but aside from those, you don’t really know what it is you need or want. This leads to a lot of unnecessary spending. It also leads to a lot of self-destructive behavior.
Most of us don’t really know how to prioritize. We’ve never done it before because it takes a lot of self-reflection. You have to look at what’s working in your life and what isn’t. You have to see which people are good for you and which are toxic. You ultimately end up much happier. But you also spend a lot less money, considering you stop spending on the things which don’t add anything good to your life. You discover what it is you want to save towards, and that makes it easier to save.
Credit card debt may seem impossible to overcome, but it can be done one step at a time. The above 3 tips will help you get started at reducing your debt.