How to Get Out of Credit Card Debt in 2022
If debt is driving you down, here’s how to pay off those credit cards.
Credit card debt can be a difficult thing to manage on many levels. First, there are those monthly payments, the ones that probably monopolize a scary slice of your income. Plus, high levels of credit card debt could actually cause your credit score to drop, making it harder to borrow money when you need it.
If you start 2022 with credit card balances to pay off, three key actions on your part could free you from debt by the end of the year. Here’s how to get rid of that credit card debt and get going.
1. Make your balances cheaper to repay
The problem with credit cards is that they tend to charge a lot of interest, so even a small balance can grow larger over time as interest accumulates. If you’re sitting on multiple expensive credit card balances, consolidating that debt might be a smart move.
One option to consider in this regard is a balance transfer. If your credit score is good enough, you may be eligible for an offer that allows you to transfer your various balances to a single card with a lower interest rate or even an introductory rate of 0%.
Another avenue to explore is consolidating your credit card debt with a personal loan. If you are able to get a loan with a lower interest rate than your credit cards charge, your debt will be cheaper to pay off.
2. Rework your budget to free up more money
You may have certain expenses in your budget that can be reduced. If so, reworking your budget could help you get rid of your credit card debt faster.
Consult your various invoices. It may be possible to spend a little less on food (for example, swapping take-out for home-cooked meals), or reduce your transportation costs by carpooling to work with a colleague who lives nearby. In fact, a series of small changes in your spending could free up enough money to significantly reduce your credit card balances.
3. Increase your income with extra work
To get ahead of your credit card debt, you may need some extra cash. Since you cannot count on winning the lottery, you can take steps to increase your income by getting a little boost. Since this money won’t go toward regular bills, you can use all of it (minus what you owe in taxes) to reduce your credit card balance to $ 0.
Believe it or not, there are a number of lucrative side activities that you can pick up without having to commit to a rigid schedule. If you own a car, for example, you can sign up to drive with a ridesharing service. And if you have a good eye for numbers, you can see if there is any medical billing or data entry job you can do at home when you have some free time in the evenings.
If you’ve got credit card debt, you’re in good company, but that doesn’t mean you have to stay there. Follow these tips and hopefully you will manage to end 2022 with your credit cards fully paid off.