It’s easy to spend money with a credit card. In fact, it is all too easy to spend with a credit card. Add to this the fact that they often start you out at interest rates that banks and other lending institutions would never even dream of, and you see it’s no wonder that so many people need to get out of debt they accumulated solely with credit cards.
Plastic can be a slippery animal when you want to get out of debt. Follow these four tips and you’ll go a long way towards getting yourself out of the red.
1. Cut your plastic in half. You don’t need it for a rainy day. Nor do you need it for a safety net. If you are in debt, then credit cards only cut holes in your safety net!
It is tempting to keep plastic around, I know. But I can almost guarantee that you’ll feel 100% better without any more credit cards.
If for some reason you absolutely cannot stand not to have plastic–and I mean by this that you literally can’t sleep well, you are so worried–then go ahead and keep one card around. At the bottom of a bowl of frozen water. I’m serious.
Before you do this, however, you should go ahead and cut it up. Life without plastic probably won’t make you as anxious as you think it will. If you have to go for the bowl solution, your credit card company will be happy to issue you another.
But please, for your own sake, try life without plastic first!
2. Stop all recurring payments. If any of your bills–electric, health membership, anything at all–are automatically billed to your credit card, make sure they stop. These don’t do anything but make your credit card debt multiply that much faster!
3. Don’t cancel any of your cards that you still owe on. I can promise you that it’s easier this way. The issuer still feels safe, because you have not cancelled your card. You feel safe, because your card is cut up and out of your reach!
This will work in your favor when you negotiate with the company. Which you should do.
4. Negotiate a better rate. Do this with all the credit card companies you owe money to. Keep in mind that the worst they can do is say no; they won’t charge you a fee or raise your rate just for asking.
Quite often, someone will agree to reduce your rate by a percentage point or two. It can’t hurt to go online and find a better offer, then tell your customer support rep about it when you’re on the phone. If they think you might pay off their card with your new one, they might be tempted to lower the rate to that of the competing offer.
This won’t work 100% of the time, but it works more often than many people think. If your customer service rep won’t give you a deal, ask to speak with a manager. You’ll never know until you try. And it’s likely that you’ll be able to get out of debt much sooner, just for taking a few minutes to talk to someone over the phone!
Raymond Aaron is an internationally-famous dynamic professional speaker on the topic of DOUBLE YOUR INCOME DOING WHAT YOU LOVE.
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