How to prevent a debt spiral?
Getting into debt is easier if you are using credit card instead of cash for shopping. We become very careless & reckless while spending when we have credit cards in our wallet. We think that we can pay later and so we often tend to overspend and sometimes even buy the things that we don’t need. The interest rates of credit cards are quite exorbitant and this often means that your debt can quickly mount out of your control and you may land up in a state of never being able to pay credit card debt. This is not a healthy sign and this habit should be checked as soon as possible. I have been into this situation and know how difficult is to get out of the credit card debt and how peaceful it is when you finally get rid of the debt.
Here are some tips to prevent the credit card debt from being spiral:
- One should always pay more than the minimum due amount. Paying more than minimum will not only reduce the interest on the debt amount but also the time taken to pay off the entire debt.
- If you want to stop your debt from spiraling upwards, then stop spending on the credit card so that the debt doesn’t increase any further. Start using cash instead of your credit card.
- Paying off the debt should be a priority for you. Start making extra payments to pay off the debt as soon as possible. Whenever you get some extra money in the form of incentive or allowance, use it to make payment to pay off the debt.
- If using multiple credit cards then you should start by paying off the debt on the credit card with the least amount. Once you have cleared the debt then close the credit card. One credit card is more than enough.
- Cut down all your unnecessary expenses, at least till the time you are under debt. Use that money for paying off your debt instead.
- Analyze the reasons why you landed in the spiraling debt and take preventive steps to ensure that this doesn’t happen again.
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