The average consumer spends between 12-18% more money when they shop with their credit card rather than paying by cash. This could be one good reason why your debts are higher than you would like them to be. Switching to paying cash and consolidating your credit card debt can help reduce interest charges and cut unnecessary spending.
Assess Your Credit Card Use
Take a long hard look at your credit card statement. You may not even realize how much you’re spending until you actually see it set down before you. Look for particular trends throughout the month, such as coffee in the morning and lunches out. Now tally up how much money you are paying to your credit card company for charging these items to your account.
Making the Switch to Cash
The first step in making the switch to cash is figuring out which expenditures you should make with cash only. The most logical spending categories to switch are the ones that you frequently overspend on, such as food items, dining out, clothing or entertainment. Once you know which areas are your particular problems you will be able to see where changes need to be made.
Creating a Cash Budget
Now you’ve highlighted the areas where there is room for change, create a new cash-only budget. Although this may mean cutting out those Saturday night trips to the movie theater, you will soon begin to see your savings growing and your credit card payments shrinking.
Leave Your Credit Cards at Home
Avoid the temptation of using your credit cards by not carrying them around with you. The fewer times you use them, the faster you will be able to pay off your credit card debt. Think of how much extra money you’ll have each month when you’re not paying those interest charges.
Getting Out of Credit Crisis
If you’re having problems with your finances, debt counseling can protect you from debt collectors who are only interested in taking legal action without listening to your problems. This is just one of the many benefits of a Debt Management Program. Check out this website to find out more.
Consolidating your Credit
A credit counselor can also give you advice on consolidating your debt. Consolidation means that your debts, including credit card payments and loan re-payments, are all combined into one monthly payment. If you have multiple debts this can be a good way to lower your payments. Your options for consolidating your debt will depend upon your particular situation.
Paying with Plastic: There will obviously be times when you will not be able to pay cash, such as if you’re making a purchase online. In these situations, instead of reaching for your credit card, use your debit card. If you don’t have enough in your bank account to cover the purchase, consider if you really need to buy the item right now. You could always wait until your next paycheck instead of adding to your credit card debt.
Avoid credit card calamity by using these solutions to help you cut down on your credit card debt. Start saving money today.
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