Eliminating Your Credit Card Debt: The Best Idea For 2024
We're already halfway through the month of November and it's been a heck of a year. With wild financial and economical swings in every direction imaginable, grasping what's happening at any given moment has proven to be more and more difficult. As a new year approaches us and individuals begin to plan (or re-plan) their financial outlook, we believe that one of the best ideas for 2024 is eliminating your credit card debt.
While this might not sound like the perfect time to do so - especially if you're resorting to credit card use for funding your holiday shopping or winter travels - there are plenty of reasons that it can benefit you. This includes having a higher credit score and being ready for whatever comes your way. Whether you decide to buy a new home, finance a new vehicle, or simply save more cash, paying less interest on your credit card tradelines will always be in your favor.
If you're just scraping by and feel like clearing your card balances is an impossible feat, think again. As the old saying goes, "If there's a will, there's a way", and instead of postponing things you can at least get the ball rolling.
Why Is Eliminating My Credit Card Debt In 2024 So Important?
Well, for starters, it's a debt. And nobody likes to be in debt. When we buy a car or apply for a home mortgage we're consiously taking on the responsiblity for something that we want or need, and the debt in that case serves a higher level of logic and importance.
Credit cards on the other hand, tend to be overused and thought of as cash, when they're really costing you a huge sum of money in interest payments in the long-term. That's especially true when you're swiping the card for things like a pair of designer shoes, a night out to eat, or a tank of gas and then not paying the balance in full each month.
Responsible credit card use is how we improve our credit, our buying power, and our ability to finance what we want when we want. While you're free to decide how you use your cards and what you deem necessary, there's a difference between healthy and unhealthy practices. And its safe to say that a lot of us employ unhealthy spending practices when it comes to our credit cards.
There's Too Much Going On To Have Lingering Credit Card Debt
As a tradeline company, we see a lot of data about card use, credit scores, and general debt. These factors are important metrics that play into our decision making as a business while also telling us what's going on in the real world with our potential and non-potential target market. It was just recently that credit card debt in the US crossed the threshold of one trillion dollars for the first time in history. There are many, many reasons for that and while it's simple to understand, the reason behind the data is much more complex.
The reason that we say there's too much going on to deal with lingering credit card debt is because that's the truth. Here's just some of the things that are affecting personal finances in the last 18 months:
- Ongoing inflation
- A highly unpredictable stock market
- Wild swings in the real estate market
- An especially strange automotive market
- Higher than expected increase of interest rates
- Skyrocketing rent prices
- Stale and stagnant wages
- Increased energy costs
- Aftershocks from the covid-19 pandemic
- Abnormal fluctuations in investment instruments
- Uncertainty in the area of cryptocurrencies
- Less consumer confidence in banks
- Unstable prices of precious metals and raw materials
- Shortages of various products and goods
- Increased energy costs
- Expert economic outlooks continually changing/wrong
We could go on and on, but the message is simple and pretty clear for anyone who is paying attention. It costs more to live right now.
Keeping food on the table, gas in the cars, insurance on those cars, rent/mortgage paid, utilities and services covered, and all the other core expenses that go into just staying alive and legal cost more than ever. Meanwhile, many industries are hurting which means that some companies have downsized and others have failed - bringing us to the conclusion that the acquisition of money is more difficult. And it's not really something we need to just hypothesize, either.
The Numbers And Facts Tell The Real Story
When we say making plans to eliminate your credit card debt in 2024 is one of the best ideas you can put into action, we know this isn't as simple as it sounds. Yet there's always a time to start working on the hard stuff, and decreasing credit card debt can be downright painful in many aspects. You'll have to skip certain luxuries, cut spending in other areas of your budget if and when possible, and eliminate impulsive purchases completely. This requires a high amount of discipline for most of us. But you must be motivated.
If there's anything that will make you want to reduce your bad financial habits and eliminate credit card debt, it would be taking a simple look at the actual facts. We'll show them to you right now, although they might not be very enjoyable to look at, we must accept things for the way they are. Here are some examples:
- US Consumer Credit Card Debt Reaches Crosses $1 Trillion USD
- Housing Affordability Hits Lowest Level In History
- Mortgage Rates Are At A 23-year High
- Auto Loan Delinquency Increasing As Many Struggle To Pay
- Credit Card Balances See Largest Yearly Rise In History
- The Job Market Is Losing Momentum
- Credit Card Delinquencies Continue to Rise
You don't even have to read the articles above to understand why now is a good time to be out of debt. The sooner you begin, the sooner you'll finish. Once your credit cards are paid off you'll have an immense amount of relief. The truth is you won't have to wait until the end, because as you make notable progress you'll start feeling great and want to continue the cycle.
Even if you're left without any cash, imagine how it's going to feel being able to deposit a whole paycheck into the bank instead of using the entire thing for paying the minimum amounts on all your credit cards, or instead of watching your balances grow higher and higher. It's going to feel really nice, and not only that, but it's going to bring your credit score shooting upward (assuming you don't have a lot of delinquencies or missed payments). And a good credit score is always a positive financial factor.
What If I Can't Afford To Pay My Balances Down?
If you can't afford to pay down your credit card debts, or if you're only able to make minimum monthly payments and having trouble doing so, talk to your lender. There are many solutions available that will have absolutely no negative impact on your credit. One of the first two things you can do is request a lower interest rate. It's estimated that over half of Americans who are paying on time received a reduced interest rate when they did nothing more than reach out to their card issuer and asked. That's pretty impressive! Responsibility and a bit of courage will go a long way.
You can also employ other methods. If you're stuck making minimum payments and can't seem to touch the principle or have no end in sight, you might want to try consolidating your credit or seeking the funds from another asset. If your credit debt is high enough, refinancing your home or pulling out some equity may allow you to pay your credit cards in full while getting a better interest rate in the long run. Each case is unique, so don't just jump into things.
Many people chose to consolidate their credit cards into a single, higher limit credit card that has a 0% interest rate for a fixed period. Some cards will include the ability for consolidation of other credit card debts in conjunction with the no-interest offers, but this isn't always the best option. If you're neck deep in credit, you're not going to qualify for a high-limit credit card with great introductory offers. However, this will be a viable option for many who are slowly watching their balances grow and are motivated to use this as an opportunity to pay their full credit card debt as quickly and painlessly as possible.
Make 2024 A Year Of Financial Accomplishment
With all the things we've discussed in this article, you know what needs to be done if you want to get your finances straightened out. There are a lot of things to think about, and while none of it happens overnight there's always a good time to make your move.
Get started now. Make a plan. Write it out. At the very least, write down a single note and stick it to your fridge telling yourself to make a plan this weekend. Include your total balance on the note, and understand that no matter how large or small it is, it's a project that must be done. Will you let the weekend roll by and do nothing because you'd prefer to be uncomfortably in debt forever, or will you make a plan to get out of your debt so you can make forward movement? If you're going to struggle with debt, why not struggle to get out of it as quickly as possible instead of struggle to maintain it perpetually?
It only makes sense to get started right away and stick to your plan. You can deal with a year of limiting your "wants" and eliminate your credit card debt, or, you can decide to stay there, miserably paying again and again for things you eventually won't even own anymore, or experiences you've entirely forgotten. Use your credit wisely, and make 2024 your lesson of personal financial growth. We know you can do it!
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