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March 15, 2016 | By: Jillian Rodrigues

The Dos and Don’ts of moving on from credit card debt

Just like with any long-term relationship, breaking up with your credit card is hard to do. It was with you through everything from spontaneous purchases at the mall to paying your cable bills. But if lately it has been tying you down with its overwhelming debt, ruining your credit score, and making it hard for you to make bigger purchases like a home, it may be time to kiss it goodbye. Here are some tips for paying off credit card debt and moving on to enjoying financial stability.

  • DO stop using your credit card immediately. How can you expect to see any progress on paying down the balance if it keeps going right back up? Not only is it counter-productive to keep using your credit cards while trying to pay them off, it’s confusing and discouraging if the balance keeps going up and down like a yo-yo.
  • DON’T sneak in casual purchases, no matter how small or justified they seem. You can’t move on from your credit card debt if you keep depending on it.
  • DO find a way to reduce or stop the interest rate. Next to payday loans, credit cards charge some of the highest interest rates. So even if you stop using them altogether, the existing balance will continue to increase with the accruing interest charges, making it difficult to pay it down. Reducing the interest rate on your debt can be done a number of ways including negotiating with your creditor(s), transferring the debt to a home equity or consolidation loan, or joining a debt management program.
  • DON’T do a balance transfer for a TEMPORARY lower interest rate. Beware of credit card companies and other financial institutions that offer you the chance to transfer your balance to a product with a lower interest rate or no interest rate, if the lower interest rate will only last a few months. If you receive such an offer, check how long the lower interest rate will be good for, because chances are once it’s over, the new interest rate may be even higher than what you were paying for before. If you realistically cannot pay off the entire balance in this time-frame, you may be putting yourself into an even bigger mess.
  • DO commit yourself to a date to move on from your debt. Once the date is set, calculate how much you will need to pay towards it each month to reach this goal. Then make it a priority to make this payment just like you would any other bill.
  • DON’T keep extending this date. Be firm about your goals to be debt free. Once you allot a specific amount in your budget for debt repayment, stick to it. 

You may feel like you need your credit cards to survive. But the feeling of financial independence when you move on from the wasted money on interest will be well worth it. And no more sleepless nights spent worrying about your debt


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