Debt Advice: How To Break Up With Credit CardsFeb 21, 2019
What was the best piece of debt advice you ever received? If you have an answer to that question follow it up with these questions: Did you follow that advice? Did it work? If yes, did you share it with someone else?
That last question is a great one and is our goal today. We want to share the best credit card debt advice we can, so here goes: It’s time to break up with your credit cards.
Debt is a major issue across Canada, with one-in-four feeling crushed by their debt. One of the biggest contributors to an individual’s debt load is credit card debt. Of all the types of debt you can accumulate credit cards are likely to have the highest interest rates; typically ranging from 18 to 30 per cent. It’s also a revolving form of credit meaning that as you pay it down it’s available to you again, which means it can be hard to break free from its grasp.
Credit cards do serve a purpose, but with the rise of debit cards that can be accepted like credit cards the necessity of having a credit card are starting to disappear.
If you want to end the relationship with your credit card what can you do?
- Have a frank discussion about it with yourself and/or your partner.
If you’re the only one involved in managing your finances it can still be a good thing to say it out loud that you want to end the relationship with your credit cards. If you have a partner have a conversation with them about why you want to break up with your credit cards and why it will be beneficial. Talking about it is the first step to taking action.
- Leave the credit cards at home.
Don’t rush to cut up the credit cards as you can still break up with the credit card without needing to cancel it. It can be a valuable asset to have in an absolute emergency. Leaving them in a safe place at home can help remove the temptation of using it when you’re out shopping or short on cash.
- Build a plan to pay off your credit card debt.
Just because you’ve stopped using your credit card doesn’t mean the break up is complete. You still need to pay off the debt you owe on the credit cards and that will need a plan. If you want to see how other people tackled paying off debt, we recommend reading Always Save Money, brokeRICHgirl, Give Me Back My Five Bucks, and The Wallet Diet. They are financial influencers who share their own debt stories, tips, and techniques for paying off debt.
- Talk with your credit card company about payment options.
You might not be aware, but you can actually call your credit card company and ask if there are any options available to help you pay back your credit card debt faster. Depending on your credit standing with them, the length of time you’ve been a client, and other factors you might be eligible to receive a lower interest rate for a period of time or if you’re really lucky a few months interest-free.
Should this be available to you, make the most of it by making as many extra payments as possible. More of your money will be going towards the principle amount owing rather than interest so that’s a BIG positive when it comes to your effort to reduce credit card debt.
- Change your relationship with money.
Once you’ve successfully broken up with your credit cards and paid off the debt it’s time to change your relationship with money. If you want to stay broken up with your credit cards, you’ll have to evaluate what led you to have credit card debt in the first place. Using that information you can help begin to develop positive new money habits such as working from a budget and tracking your spending.
There you have our five tips to help you once-and-for-all break up with your credit cards.
If you enjoyed reading our best piece of debt advice related to credit card debt make sure to share it with others. For more debt advice, join the conversation on Twitter and see how others are choosing to #LeaveDebtBehind and change their #RelationshipWithMoney and #Debt!