By Mashum Mollah
It can be surprisingly easy to let your debt get out of control, especially for the young and inexperienced. You might suddenly wake up one day and find that your credit card bills have gotten completely out of hand, seemingly overnight.
Fortunately, even if you’ve found yourself in over your head with overdue credit card bills or loan payments, it is entirely possible to get yourself out of debt with some discipline and a few simple shifts in your attitudes and spending behaviors (and maybe a debt payoff calculator to show you that the path to a debt-free life exists).
#1. How people fall into the debt cycle
First, let’s examine how one might find themselves in an overwhelming amount of debt. Around 13% of Americans are carrying some form of student loan debt, a figure that totals around $1.6 trillion. If you’re part of this group, then you’re already starting the race with a handicap.
Even if you are fortunate enough to not have any student loans, you’re still likely to be one of the almost 200 million Americans with a credit card. The average cardholder has two to three credit cards, and the average household is in about $5,000 of credit card debt. While this doesn’t initially sound like a problematic amount to owe, a pattern of bad behavior can rear its head when you begin to factor in things like rent, car insurance, groceries, and other living expenses.
So, when a big chunk of your paychecks are going towards unavoidable expenditures, where does everything else wind up? On those credit cards, we just talked about. But even if you aren’t using credit cards as a necessary evil to keep you afloat between paychecks, it’s easy to fall into the trap of a revolving door of never-ending debt just by the merit of how easy and convenient they are to use.
#2. Reframing the role of credit
The trick to getting yourself out of debt (or maybe even avoiding it entirely in the first place) is to just ditch your credit cards completely and remember the old adage: cash is king. Pay for everything outright to better balance your budget and help quash your debt. Along with this process, there are several other methods including the help of Punch Associates, to get rid of a compulsive credit card debt.
Provided, you can save on your EMIs(within which you’re already drowning), by Personal Loan Balance Transfer to switch to a better option. This tactic either may help to some extent to get out of debts.
It’s worth noting that using credit cards isn’t inherently bad. In fact, using your available credit is one of the most straightforward ways to improve your credit score. But we’re here to figure out how to get out of debt, which can also have long-term benefits on your credit score and general financial health.
The psychology behind the appeal of credit cards is founded on the idea that it almost feels like “free money.” In reality, frequent or compulsive credit card spending can cause you to pay more for things than they are actually worth in the form of interest payments and late fees. You’re much more likely to deviate from a budget or spend outside of your means.
While the prospect of being able to rack up a huge credit card statement and pay it off in monthly increments may be enticing, it might perpetuate a cycle of ever-increasing debt that will only become more difficult to escape with the passage of time.
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