Manage Credit Card Debt Better With These Tips Item


FORT LEONARD WOOD, Mo. – Fall is here, and with it comes the annual holiday shopping season. While credit card debt can pile up at any time of the year, people tend to spend a bit more when looking for the perfect gifts for their friends and loved ones. Americans averaged over $ 1,000 in vacation debt last year, and the majority said they wouldn’t be able to pay off if they were turned off by January.

Below are some tips for avoiding or reducing credit card debt.

Make a budget and stick to it

It’s hard to spend within reason or plan for savings if you don’t know how your monthly spending compares to your take-home pay, or where that money is going. That’s why you should categorize your expenses – including debt payments, emergency fund contributions, and other savings – and cut back on fat, if necessary. Most importantly, once you’ve developed your budget, stick to it.

Create an emergency fund

With a cash safety net to lean on, you aren’t as likely to fall behind on your bills for urgent expenses or unexpected unemployment. Your goal should be to gradually save about a year of after-tax income. In other words, reserve a little every month until you have a good cushion.

Improve your credit

This might sound a bit counterintuitive, as more credit could mean more debt. But improving your creditworthiness will have a huge impact on the cost of your debt. And lowering the cost of your debt will allow you to pay it off faster. Better credit can also make it easier to find a job or a home, which impacts your bottom line. You can view your latest credit score for free and get personalized credit improvement advice at, and you can retrieve your credit report at

Try the island approach

The Island Approach is a strategy of using a collection of credit cards, each serving a specific purpose. For example, you can transfer your existing debt to a zero percent balance transfer credit card to save on finance charges and get out of debt faster. And you can use one or two rewards cards – maybe one with travel rewards and one with cash back, or maybe an in-store credit card – for purchases that you can redeem by the end of the. month. This will allow you to get the best collection of terms possible. It will also tell you when you are overspending. The finance charges on your current spending cards will signal the need to cut back.

Pay off your most expensive debt first

Most people with severe credit card debt have multiple balances. If this is your case, try the “avalanche method”. This means putting the majority of your monthly debt payment toward the balance with the highest interest rate and making the minimum required payment on the rest. Once your most expensive debt is paid off, repeat the process until you are debt free.

Assess your professional situation

In some cases, all the budgeting and planning in the world won’t be enough to solve your debt problems. You may need to determine if there are more rewarding opportunities for people with your experience or consider learning new skills to make yourself more marketable. It may take a bit of investment in yourself, but as long as you get a good return, it’s money well spent.

(Editor’s note: The appearance of external hyperlinks does not constitute an endorsement or recommendation of the United States Army.)

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