A plan to get out of credit card debt can guide you to financial health.
In this edition of “Change Matters,” financial wiz Paco de Leon spells out how.
Your 4-step guide for creating a plan to get out of credit card debt
1.
Only then could I decide that the debt was an expensive lesson that I needed to learn.
In my case, this step helped me mindfully and intentionally get out of debt.
Get to know your debt: How much do you owe and to whom do you owe it?
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By law, you are entitled to one free copy of your credit report per calendar year.
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Having your plan in place can also keep you motivated because you know the direction where youre heading.
And lastly, a plan will give you your debt-free datethe day youll be out of debt.
Once you pay a balance, youve proven to yourself that you might pay off a debt.
Its like watching a basketball go through the hoop; its motivating and encouraging).
4 key considerations for your plan to get out of credit card debt
1.
Is your debt manageable or unmanageable?
When should you consider consolidating your credit card debt?
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The decision to consolidate is not a one-size-fits-all decision.
What are your consolidation options?
But beware of how this may impact the dynamic of your relationship.
And the better your credit score, the better your options.
For people who have trouble with traditional lenders, there are also peer-to-peer lending options likeLending TreeandProsper.
What about a balance transfer?
A balance transfer is when you move your balance from one credit card company to another.
Usually you do this because of a promotional APR, like a 0 percent APR for 12 months.
There is usually a 3 percent fee to do this, so confirm you factor that in.
Paco de Leon is the author and illustrator of her forthcoming debut book,Finance for the People.
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