Learn to Live a Debt Free Life

Avoiding the vicious cycle: How to eliminate credit card debt

Credit cards are a great way for people to purchase items and goods that they need, even if they do not have any cash with them. The prospect of a cashless transaction promised by credit cards is also a very promising one, for people do not have to bother bringing money with them whenever they go shopping or when running errands. But of course, using credit cards also has its disadvantages, and sooner or later, the debts incurred by people from using these cards would have to be paid, and the detriment to this is the fact oftentimes, these debts come with hefty interest rates. These interest rates is where credit card companies derive profit from their customers, but for people who wish to free themselves of credit card debts, these interest rates would hurt their wallets.

This is because they increase whenever they fail to pay their debts or whenever the credit card is used in another transaction, which only adds to the previous debts that they had already incurred, thus creating a vicious cycle wherein it will take many years before the debtor can finally free themselves of these credit card debts. When paying off these debts, a huge portion of their income is also removed from them to pay for these debts, thus further hurting their finances. Some people have fallen knee-deep into these debts because of their impulsiveness when it comes to shopping for items and good which they can purchase with their own money, such as clothes, shoes, and groceries. But there are other, more unfortunate people who fall into this undesirable predicament because of a sudden illness in the family or the unexpected loss of a job.

Fortunately, there are ways on how to eliminate credit card debt, which will help these people to finally free themselves from the burden of having to pay these debts and the hefty interest rates that come with them for a long time. The first step on how to eliminate credit card debt will be to stop using credit cards. Using credit cards will further add debts to a person who already has a lot of debts, and putting an end to this would have to be necessary. Of course, using as much cash as possible will initially be difficult for people who have already grown dependent of these credit cards, but they will have to train themselves to be independent of credit cards by using cash as much as possible in any of their transactions.

There are other ways on eliminating credit cards debts, one of which would be for people to pay off their credit cards with the highest interest rates first, as this would eliminate the credit card which takes the most of the person’s income. This should be done until the bill for the credit card reaches zero, after which they can proceed to pay off the credit card with the next highest amount of interest rate, doing so until all of their credit cards have been paid.

But of course, the most important step on how eliminate credit card debt on a long term basis is for people to be smarter when it comes to spending their money. They can explore alternative options to purchase items and goods, such as during clearance sales, and even going to thrift stores for clothes, shoes and other apparel. This way, not only will they be able to end and eliminate their credit card debts, but this will also ensure that they will not experience credit card debts in the future.

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