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Trying to get ahead?
We have to give you credit.
It could be those alluring department store credit cards. Or it could be college loans. Or it could even be an unexpected medical emergency. When you look at the big picture, it doesn’t really matter how you got into debt, the important thing is to focus on the best way to get yourself out.
Realize you’re not alone.
It’s a sad fact that an overwhelming 70% of Americans say their current level of debt is making their home life unhappy.¹ It’s not be the best company to be in, but it may help to know that debt can happen to smart, educated people with the best of intentions. And don’t forget, it’s never too late to start getting out of it.
Shop smart. Spend wisely.
Credit cards are the most widely used financial product in the country. And why not? They’re convenient, easy to use and can even help your financial standing. That is, if you use them wisely—because if you have a credit card, you have a credit score. A good one can unlock doors for you—a bad one can have lenders closing the door to your dreams.
Fast Fact! More than 80% of households have at least one credit card.²
The first thing to realize about credit cards is that they exist to make buying things easier. Not to help you buy things that are out of your reach. A general rule:
- Set a limit of, say, $100 when you’re considering buying something.
- Anything over $100, give yourself a 24-day grace period to think about it.
This should help control impulse spending. Or, just ask yourself, “Could I afford this if I paid in cash?” If the answer is “no” then you’re probably spending beyond your means. The same goes when you’re borrowing money for a car or home. Simply put: never buy more than you can honestly afford.
Make a plan. Stick to it.
One of the easiest ways to get moving is to cut back on your fixed expenses. Cut premium cable. Trade in your cell phone plan for one with fewer minutes. Skip the daily lunches out. Painful, you say? Not as painful as having no money for retirement. And consider this: a recent Retirement Confidence survey indicated more than 72% of American workers admit they could be saving an additional $20 a week for their retirement.³ You’ll adjust in time and the money will start to add up.
Once you have some extra money, you can begin paying all unnecessary credit cards. Here’s how:
Step 1: Take a look at the Annual Percentage Rate (APR) on every card in your wallet.
If possible, transfer balances from higher rate cards to your lower rate ones. You can even call your credit card companies and ask for a lower rate—they want you as a customer and will do almost anything to keep you.
Step 2: Start to pay off the cards that have the lowest balance, starting with the ones that have the highest interest.
Even managing to pay off one credit card will give you a feeling of accomplishment and will encourage you to keep going.
Step 3: If you need help contact a reputable credit counselor.
Once a card is paid off, you can take the money you were paying to reduce it and put it away in your savings account—a necessary component of any successful plan.
Dream big »