How To Pay Off Credit Card Debt When You Have No Money
Have you ever been in credit card debt that feels impossible to dig out from? You’re not alone. Most of us go through this issue, particularly when life hits us with unexpected bills. When you start to feel hopeless about your finances, it becomes so easy to throw in the towel and think that debt repayment is something unattainable. But what if I told you there are real steps you can take right now to begin addressing that debt, even during lean times?
This blog post is my way to tell you about how I got into credit card debt and recovered successfully. Some surprises that may come true along the way. Now, let’s get a little more real on how to pay off credit card debt when you’re broke AF.
Knowing Your Credit card debt
The first step to deal with debt is knowing exactly what your debt entails. This is not only a figure on a document. Interest rates, the amount of minimum payments and how you spend. Take All Your Statements and Start Compile a spreadsheet that includes the card balances and interest rates.
It can be easy to forget how these numbers end up. The first time I ever tallied it all up, I do. I was shocked! I knew, or at least I thought I did, but then I saw the counter and it became a real number.
Why does this matter? While you deserve to feel good about your spending habits and debt payments in general, knowing specifics can help determine which other debts you want to pay off right now.
This data gives you the information to strategize your approach.
Set Your Own Budget
How to budget is not just about tracking your expenses, You need to have a strategy in order to achieve those goals. Some of you may find budgeting as a boring idea, but believe me it can kill two birds with one stone.
Conversely, the categories must include essentials such as rent, groceries or utilities if you are working on a personal budget. Then, figure out your income.
What’s left over? Not really… Do you think you have some fat to trim?
For me, this was a reality check for how much I get takeout. I saved so much by making meals at home.
Enable apps or spreadsheets instead, to maintain a budget.
Getting Your Finances Out in the Open continued…it can help you understand the whole picture of where money is going.
Prioritize Your Debts
Once you have it in black and white, focus on getting your debt under control. Obviously there are a few unoriginal ways of approaching that.
1. Snowball Method – Start with your lowest debt. Pay off it and move on tot he next one. This way you will have fast results.
2. Avalanche Method: This method involves paying the debt with the highest interest rate first. This method will end up saving money on the long run.
You just have to select whichever method you can relate with. In my case, the snowball method was a charm. All of a sudden, I had the not-too-small anymore “smallist card” paid off. This kept me going.
Negotiate With Your Creditors
It appears most have no idea that it is, in fact, possible to negotiate with creditors. If however you are experiencing problems, simply contact your credit card firm.
Explain your situation.
They could provide interest rates, or eventually offer a reduction of that sum. I was shocked with just how understanding they were when I finally reached out for help.
If they are transparent, it might lead to smaller payments.
P.s Get it in writing.
Find Extra Income Streams
Because sometimes the answer is to earn more. This can be intimidating, but it should not be. You have many options to make some extra money.
Consider these options:
1. Use what you already know to make money freelancing. You can certainly find gigs on websites like Fiverr or Upwork.
2. Selling Stuff: Look around your abode. Do you have crap that you no longer need? It might not sound like much, but it adds up.
I cleaned out my closet one time and made a few hundred bucks. It was so awesome to both declutter and get paid for it!
3. Work-part-time : If your time table permits, you could work parttime. Most organisations are hiring for flexibility
Think outside the box.
These multiple income streams can really add up when it comes to getting rid of your debt.
Cut Unnecessary Expenses
Revisit the Way You Spend Wasted Subscriptions Is there a subscription that you do not use? Or maybe you are dining out more than you need to?
Determine What You Can Sacrifice
I stopped paying for a gym membership I never used. So what did I do, you ask instead of going in the gym.. was same as any other machine just to start working out at my place at home. Which helped me save money, while staying active.
The little changes can save you big over the years.
Debt Avalanche or Debt Snowball Method
Finally, as we discussed before, choose a pay down strategy that can follow through your style. Now that’s the good stuff right there.
When should you follow the Debt Avalanche: Pay down all debt aggressively. While dealing with this, pay the lowest possible amount on others.
First Step: Smallest debts paid off soonest → Debt Snowball
You can even combine them. For me, I started with the snowball method in order to get motivated. I started with getting momentum and then changed it to avalanche method this way I pay less interst.
Credit Counseling from a non-profit
If you feeling overwhelmed by debt consider calling a nonprofit credit counseling service.
They will provide free or low cost assistance for you to keep on top of your debt.
These counselors can help you build a better plan to address your debts. These people have seen it all, so ask for help.
Contacting someone for help and share, it felt as if a heavy burden was lifted. They really helped me learn to look at my debt differently
Consider Debt Consolidation
Debt consolidation can also be an alternative when your credit card debt seems out of control.
In other words, it is a single loan that is used to pay off other loans.
This is intended to help you obtain a lower interest rate and make your payments more manageable. But, do your research before.
I thought through this path but I don´t think it was the best choice for me. Everyones path is different
Remain Inspired And Recognize Mini-Wins
Diem — Paying Down Debt is a Long Hill to Climb Celebrate your small wins, to remain motivated.
Our simple questions like have you just paid off a credit card. Benefit yourself to a nosegay
When something special happened, I would write it in my diary. Every penny I spent, Rebecka would spend in small pleasures. It kept my spirits up.
But, this is a marathon and not a sprint.
Track Your Progress
It will help you to keeps track of your achievements and announce progress can be a great motivation.
Draw a Picture of Your Path
I found myself creating a basic chart on how much I had paid. It became rewarding to see that number drop.
Either by using apps or good ole spreadsheets. Whatever works for you.
Avoid New Debt
Avoid adding new debt while working on paying off existing debt.
Forget credit cards on purpose
It was freezing my credit cards after all. I mean, that is silly but it worked! If I was buying something, I sat and waited for ice to melt!
That small trick helped me stop the cycle of using those credit.
Build an Emergency Fund
Once you are beginning to make headway, think about your rainy day fund.
If a person has savings, then avoids to debt in future.
Start small. Aim for $500 or $1,000. This can help take care of any surprise costs that come your way without charging them instead.
It was a bit powerful when I at last had a cushion.
Live Frugally
It has been of game changer for you to live a minimalist lifestyle.
Distinguish your needs and desires.
Going through an attitude adjustment like this can save you money.
I cleaned my home and life. Having less stuff lead to less distractions and more money left in our finances, my main goal.
Learn From Your Experience
Reflect on what you have learned as you pay yourself out of credit card debt.
What Are The Habits That Lead You To This Debt?
Knowing what they are can help you steer clear from falling into the same trap.
I realized that an individual lapse was the hardest to deal with. I now write a list of what I need to buy before I go out.
KEEP UP TO DATE WITH FINANCIAL LITERACY.
While improving your financial literacy is an extremely good idea.
Because the more you know, the better choices you can make.
They read books, take courses, go to workshops or even sign up for online classes.
I checked out and completed a few online courses about money, which gave me change of view. Empowerment comes from the knowledge of how money works.
Spend Time With People That Support You
Your support system can mean the world. Tell friends and family. You are about to be amazing at how many people will rally in support.
I teamed up with an accountability partner who was in a similar financial position. I also had someone to lean on through the all of it.
Conclusion
For most of us, paying off credit card debt when you feel like you have no money is like running a 5K with an open fracture. It is good to know your debt, create a budget, and pay on high priority debts ( Save Money improve Budgeting), Negotiate with Creditors and Get Extra Income to help you gain control of your financial future. Lean on a community, be open to learning through experience and acknowledge every small triumph.