How frequently do you find yourself repaying the same credit card debt? Maybe you’ve cleared a debt ranging from $5,000 to $15,000, and have sworn that you will steer clear from credit card debt, only to land back in the same trap a year later.
I’m not here to pass judgment, I understand, I’ve been there more than once.
When my spouse and I tied the knot, we discovered that we had accumulated $5,000 in credit card debt. It took us a few months to stabilize our finances before we became serious about debt clearance. Within half a year we had managed to settle our credit card debt, excitedly believing that we would never find ourselves in a similar predicament. However, over the subsequent two years we found ourselves in the same vicious cycle. Despite our best efforts to steer clear of debt, we repeatedly found ourselves back at square one, primarily due to unexpected medical expenses and other unforeseen emergencies.
Why didn’t we just discard our credit cards? Well, my husband’s credit was average at best and we were sincerely trying to improve his credit score. We often relied on our credit cards as a safety net and despite our finest efforts, we always appeared to be one paycheck away from clearing our credit card debt.
So, how do you break free from this taxing cycle of credit card debt for good? Here are some pointers:
DISCARD YOUR CREDIT CARDS
This is, undoubtedly, one of the most straightforward solutions. Get rid of your credit cards! While this might come across as an easy way out, it may not be the most beneficial course of action. Roughly 15% of your credit score is influenced by the duration of your credit history. Thus, closing a longstanding account could detrimentally affect your credit score. So, while you might confidently believe that debt is a thing of the past, maintaining a good credit score is vital for a host of other reasons.
For instance, some employers now incorporate potential employees’ credit scores into their background checks. A solid credit score is essential for obtaining a mortgage or leasing a property.
CLEAR DEBT AS YOU INCUR IT
What my husband and I have employed in our efforts to squash the debt bug, is that we settle our credit card purchases instantly. For instance, after a trip to the grocery store, I retain the receipt and as soon as we return home, I transfer the corresponding amount from our bank to our credit card.
This approach is beneficial in two ways: we reduce the risk of drowning in credit card debt, but we continue to accrue points from using our credit card.
By charging all our purchases to a credit card, we gathered enough points to secure two complimentary flights to New York for a holiday.
No matter what you choose to do, stick to your decision and do not get swayed by the temptive allure of credit cards.
