Paying off credit card debt is challenging. You’ll run into even more challenges if your monthly income doesn’t cover the minimum payment on your credit cards. If you want to start paying off your debt on a low-income budget, you must have a good understanding of how much you owe and your spending habits. By determining your necessary expenses – and cutting back on unnecessary ones – you’ll take a big step towards financial freedom.
Here are some suggestions that can help you get out of debt with a low monthly income.
Avoid Taking on More Debt
Start with the big-ticket items. If you are struggling with credit card debt, it isn’t a good idea to continue racking up debt. Large purchases will add up and only make things more stressful down the road. It’s up to you to take control of your finances and avoid bad spending habits, as well as unnecessary purchases. Having better control can only benefit you, and may be helpful for emergency situations.
The best thing to do is to stop using credit cards whenever possible; even small purchases made with a credit card add up, and the accompanying interest rates only make your burden heavier.
Cut Back on Monthly Subscriptions
Write out a list of your monthly costs, fees, or subscriptions, and take a look at where the majority of your income is being spent. If you have a low monthly income, cutting back on your subscriptions, such as video streaming services or expensive gym memberships, can make a difference. If possible, it may be best to try to cut out these types of expenses completely; consume free content or try at-home workouts instead.
If you feel that you really need these monthly subscriptions, try to opt for a cheaper package, even if that means losing some benefits. Remember: You’ve got to change the way you think about your spending or you’ll never get out of debt.
Avoid Balance Transfers
Some credit card companies will offer balance transfers with promotional interest rates to get you to transfer your existing debt to their card. At first glance, these offers seem like they could be helpful, but they’re actually not. Balance transfers will only buy you a little time before you are forced to pay high interest rates again.
Aside from the added fees and interest rates of this new card, your credit score can also take a hit. Any time you open a new credit card account, your credit score can be affected. Be cautious when you see promotional offers – they could be tricking you into paying higher fees in the future.
Apply for a Loan to Consolidate Debt
If you’re looking for a long-term fix that will save you money, apply for a debt consolidation loan. You decide the terms on a consolidation loan, so you can pay off your debt at a rate that your monthly income can handle. Overall, the average interest rate for a personal loan is lower than the rates from credit card companies. Every month you’ll pay one payment, so managing your debt will be much easier. Once approved for a loan, you’ll save time and money as you manage one payment each month – a payment that you can afford.
Let the specialists at Lendah find a customized consolidation loan option for you. It only takes one application to find your best options.
If you have questions about debt consolidation loans, speak to our team of knowledgeable professionals. Our compassionate loan matchmakers will find the best terms tailored to your unique situation with fast approval and rates starting as low as 3.84% for amounts up to $100,000.
Get started today on our website. Prefer to talk in person? Call us at 833-453-6324 and we’ll get you connected immediately with one of our loan experts.