This is Dr. RandiB., your board-certified pediatrician and financial wellness expert. I provide your RX to wealth and financial well being. I’m also the author of my Amazon number one bestseller Ladynomics: A Woman’s Prescription for Wealth and Financial Well Being.
Americans are inundated with debt. Americans hold over $1 trillion in credit card debt with the average credit card holder having a balance of over $5,000. That is a lot of money. $1 trillion! That’s an insane amount of money debt! What’s sadder is that the average savings for Americans is $5,000, so something’s not going right. This tells me that Americans are living above their means and sacrificing savings and investing.
Here are five strategies to reduce credit card balances and will free up monies for savings and investing!
Pay your bills on time. Not only do you maximize and preserve your credit score, but you will also prevent late fees and a possible increase in interest rates, i.e. a default rate. A great way to ensure on-time payment is set up automatic payments.
Pay more than the minimum payment. Ideally, the goal is to never carry balances month to month but if you can’t do that, pay at least the minimum and ideally more than the minimum! The reason being, if you only pay the minimum payment, you may& never get rid of that balance. And do you know why? Because they take a percentage of your balance. That’s how they come up with your minimum payment. It’s not a set amount like when you buy a car or if you have a mortgage, it’s a percentage of your balance. For example, if you have a $10,000 credit card balance, you could be paying that balance for 10 to 15 years because it’s a percentage. They’ll end up taking 10 to 20 percent or more of the full balance.
Become aggressive! Make debt reduction your number one financial priority. Look for extra income or reduce expenses to apply towards your credit card debt. Find a side hustle such as extra shifts or find expenses to reduce or eliminate.
Snowball ball those payments! Dave Ramsey, a personal finance guru, is a big advocate of this. Once you have paid off a particular debt balance, take those payments and apply to another balance. Continue to do this until your debt is completely gone! It will happen sooner than you think!
Stop the hemorrhage! Do not add more debt! No more credit cards—no matter how tempting they may be! Pay down what you have. Once you are no longer paying off debt, apply your newfound disposable income to wealth building.
Follow these strategies and you will be well on your way to becoming credit card debt free!
This is Dr. RandiB., your board-certified pediatrician and financial wellness expert. I provide your RX to wealth and financial well being. You can follow me on Twitter, Instagram, and Facebook at @DrRandiBMD. My book Ladynomics: A Woman’s Prescription for Wealth and Financial Well Being is available on Amazon and other retail stores. An autographed copy is available via www.ladynomicsbooklaunch.com.