Breaking up is hard to do. You’ve been together forever. It’s gotten comfortable. You even have the set of cozy matching sweats to show for it. But you know it’s time. I’m not talking about that relationship with your partner! I mean that credit card debt you used to buy the cozy sweats!
And you’re not alone. Almost half of Americans have increased their amount of credit card debt in the last couple years to a staggering $357 billion nationwide! For many, the last few months have been trying to cycle that debt onto new promotional rate cards to try to stave off having to make size-able payments. But really, that’s just pretending that a date at a new restaurant will keep a failing relationship alive.
With credit card interest rates predicted to increase up to 16.9% this year, what’s needed is a more holistic and sustainable answer that lets you be free from that debt for good. Below are some possible ways to help you break up with debt.
How to Break up With Debt
- Review your budget and set aside more to pay them down faster. Paying just the minimum payments could mean carrying that balance for years, 20 years or more. Your statement tells you how much you’d need to pay to get it paid off in 3 years. If you can’t do quite that much, aim for as much as you comfortably can.
- If you’re considering going the consolidation loan route, weigh in the origination or transfer fees and confirm the interest rate before you sign on the dotted line. Closing the credit cards you pay off is STRONGLY recommended. No, it’s not ideal for your credit score, but it can be all too easy to use the cards again and then have twice the debt!
- Check out whether a Debt Management Program (“DMP”) might be a good fit. A DMP gives the convenience of a consolidated payment, lower interest, and generally lower payments as well without the credit check of a consolidation loan. And getting a quote is always free. It may also be kinder to your credit than settlements or a lot of other types of consolidation repayments.
Need guidance on how to break up with debt? Whether the right answer is creating a workable plan to tackle the debt yourself, a Debt Management Program to streamline the process, or a bit of both – we’re here to help. Click here to get started right now online for a free financial analysis and custom debt management plan.