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Pay Off Credit Card Debt With Punch Associates and Planning

Credit card debt. It’s something that most adults have and wish they didn’t. I count myself as one of those people and it seems every time I have good intentions of getting a card and paying it off every month, something happens and I end up with credit card debt.

I know I’m not alone in this. According to this article on CNBC. 55% of Americans with credit cards have credit card debt. That means over half of the people that can get a credit card has to carry a balance on these cards.

I have four credit cards currently and that is a bit more than the average of two cards in the United States. According to Credit Karma, it’s not how many cards you have, but how you use them that matters. That is why so many people are trying to get out of credit card debt, including myself. It’s not a fun thing to be in. Credit card debt keeps you from doing things in the long run. Yes, when you have room on your credit card to charge things you can have a blast spending money on trips, food, and entertainment. However once that bill starts coming in, you have to pay that with interest. This makes sure you have limits as to what you can do in the future.

Add in student loan payments, a mortgage and car payment and you have a huge limit to what you can do with your life. All of those bills are normal, but eliminating credit card debt may help you be able to enjoy life a bit more since you won’t be paying a huge interest rate for your fun. The question is how do you get yourself out of credit card debt?

There are many options to help you pay down your credit card debt, you can make extra payments, use financial advisers like Punch Associates, or even take out a loan to pay down your debt. Below I go over these options and a couple of others, but first off you need to know what you can afford to do when it comes to your credit card debt. 

Planning What You Spend

For many people in credit card debt, it can be hard to get help paying your cards down, the only way you can work on lowering your credit card debt is by budgeting and finding ways to cut your current cost.

Your first step in planning what you spend is to take a good look at your bills. Do you have things you don’t need? A subscription or cable TV. You may think you need it, but can you go without it for a year so you can pay down that debt?

The next step is setting up a budget and sticking to it. Now many people will tell you to pay all of your bills and leave your spending money for last. If your budget is tight you may not have spending money anyway, but if you find you have a bit of room giving yourself some fun money will help make the next few months or years bearable. 

Tips to create a budget

  1. Get all of your bills together
  2. Get your bank and credit card statements
  3. Write down all of your bills from both 1 and 2
  4. Write down the due dates next to each bill
  5. Figure out what bill can be paid with what check. 

You can create a budget easily with excel, word or google docs. If you are still not sure what to have in your budget you can check out this monthly budget planner from Charles Schwab

Paying extra on your cards

You can also try to pay extra on your cards. Depending on your budget you may be able to put extra on each card per month. If you can’t set up a rotating schedule of extra payments on each card. Figure out how much extra you have after paying all of your bills, then try to pay at least $20 a month extra on one or two cards. If you can do all of the cards you own, even better. Remember, even a little will help a bit when it comes to paying down your credit card debt.

You have two options to decide what cards to pay off first if you want to just work on one card at a time. You can start with the one with the highest interest rate, giving you a bit more of a financial boost, or you can pay off the lowest card first if you need that motivation. I would do both if you can. Pay a bit on both your high-interest rate card and a bit on your lowest balance card so that you get the best of both.

If your not sure what it’s going to take to reach your payoff goals, you can check out this credit card payoff calculator from NerdWallet

Using a service like Punch Associates

You can also look into a firm like Punch Associates that can help you with money management. These services can usually give you a custom plan that will help you to get yourself on track and help you to pay down your debt faster. This service does cost, but sometimes it’s worth the extra to get the personalized help you may need to get out of a mess.

Getting a 0% interest rate card

Another great way to get rid of your credit card debt is to open another credit card. Yes, I know this may make no sense to you, however, if you can get a 0% interest rate card and can pay it off before the introductory offer ends, this will help you pay your balance faster.

This of course only works if you can also keep yourself from using the other card. Cut it up or freeze it if you are worried you would be too tempted to use it. Don’t cancel it right away as it will help your credit as well. Once you pay off all your cards you want to pick one to keep. If you can make it the oldest one.

Getting a low-interest loan

Another option you have to pay down your credit card debt is to get a loan from your bank. This only works if you have the credit to do it, but it’s a great way to take all of your credit cards and make one payment instead of many. The interest rate on a loan is much less then what you pay on a credit card. There are a few factors that you will want to consider before getting a loan to pay your cards off. Experian has a great article on what you need to know, you can read that here. However, here are a few basics.

Check your credit score first- if you don’t have a good score you probably won’t get a loan. You don’t want to ding your credit if you know you cant get what you need. If you do have a low score, keep paying what you can to get it up.

Figure out if the terms of your loan will work for you- A loan is not always the right answer. Does your credit card have insurance for if you lose your job? If it does and your loan does not, it may make more sense to just keep paying on the card.

Hopefully, with these tips, you will be able to start your journey to paying down your credit cards. It’s a long process, one I’m still working on myself, but with time and due diligence, you can make it work.

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