What if I Can't Afford My Credit Card Minimum Payment
What If I Can’t Afford My Credit Card Minimum?
Many Americans find themselves in a true crisis. They have racked up debt on multiple credit cards. It can be difficult to make payments on all these cards while also taking care of other essential expenses, such as paying rent or making car payments. You do not want to make the mistake of simply neglecting to pay off the debt because this is only going to hurt you in the long run. Before you panic, take a deep breath and follow some basic steps so that you can continue making minimum payments.
Organize Your Finances
Many people get stressed out about their credit card payments because they have not organized them properly. The other course of action many people take is simply pay off credit card bills according to which ones come first in succession. That is also a mistake. There are numerous factors you need to consider, and they include:
Minimum payment amounts
APRs
Due dates
Cash advances vs. purchases
All these factors need to be known and considered. For example, if one of your credit cards came with a zero percent balance transfer deal, then that would be something worth noting. Once you know everything about your bills, you can then prioritize and figure out which debts need to be paid off first.
Focus on High Interest Cards
First, you need to see if you have any cards with a zero percent initial interest rate. Some cards offer consumers with this rate so that it is easier to pay off a debt. Consumers get a grace period, but as soon as one payment is late, then the consumer is hit with a high interest rate. Instead of getting stuck with a lot of interest payments, you should pay off these debts in full first.
Once you take care of that, you should focus on the cards that come with the highest APRs. If you allow these to fall to the wayside, then a majority of your debt is going to become interest payments. This can make your overall debt substantially larger, and you do not want to neglect it. By organizing everything first, you know which debts need your attention the most. Once you focus on the high APRs first, then you can move on to the lower ones.
Plan Better for the Future
As daunting as all this may seem, the day will come when all or most of your debts have been paid off, and your finances get back on track. At this point, you want to take action to make sure you never end up in this kind of situation ever again.
A few steps can help accomplish this. First, make sure you develop monthly budgets, and stick with them. Part of this budget plan should involve paying off your credit card in full every month. If you need to, then you may want to look into finding a secondary source of income. A second job, even if it is temporary, can help you pay bills on time.
When you find yourself in a difficult debt situation, it is vital to be proactive. Take steps so that in the future, you are on better financing footing.
People Also Liked: