- October 20, 2022
- Posted by General Electric Credit Union
- 4 read
Credit Card Debt Have You Spooked? Here's 3 Ways to Reduce It
If you have credit card debt, traversing the debt payoff landscape may feel like making your way through a haunted trail. While the balance may be scary, there are simple tips you can enlist to get out from under debt and enjoy a financial life that's more sweet than sour.
The top 3 ways to overcome credit card debt
1. Have a plan
Picture this: You’re trick or treating and trying to get to the house known for the good candy. You know, those king-sized candy bars? The only problem is you don’t have directions to get there. While you may reach the destination eventually, you’ll likely have to spend more time wandering the neighborhood before you do. Tackling debt without a plan can bring similar results. You’ll pay off your credit card balance in time, but it can take longer and potentially even cost more to do so.
This is because any balance you carry over per payment cycle incurs interest. Left to compound, it’s easy to see how this can snowball out of control into a scary financial picture. By creating a debt payoff plan, you can determine a manageable amount to save for debt payoff each month, as well as how long it’ll take to get out of the red. Simply knowing when you can expect to get out from under debt is a powerful thing, so don’t skip planning!
- Not sure where you’ll find room in the budget for debt payoff? Use Money Management to create a budget and pinpoint which categories to cut back in to make room for credit card payments.
2. Consider a balance transfer
Remember when you and your friends would return home from trick or treating and trade candy? The savings you’ll enjoy with a balance transfer are just as sweet!
You can trade in a high-interest card for a low-rate card through a balance transfer. Essentially, the remaining balance on your current card will get transferred over to the new one. As you pay off the balance, you’ll incur less interest over time than if you had kept the old card. This can make debt more manageable and provide some cushion to your budget.
- Great rates are just one perk of a General Electric Credit Union (GECU) credit card! You’ll also enjoy FICO® Score access, money-saving benefits like purchase security, and no-cap reward options.
3. Reduce spending
Discretionary spending includes any purchases that are nonessential. If these purchases are part of what got you into credit card debt, it’s important to address poor spending habits. In doing so, you can help ensure they won’t derail your debt payoff progress. For example, a $500 transfer to a credit card will go much further if you don’t turn around and spend $1,000 the next day on things you didn’t need.
Review where your money is going and brainstorm luxuries you can live without. For example, you don’t necessarily need to nix eating out. But if you find yourself paying for food delivery multiple times a week, consider opting for pick up instead. Even an extra twenty dollars a week can add up month-to-month, so don’t underestimate the little things!
Moving forward, always check your checking and savings account balances before making a purchase to confirm you can afford them. Set up Online Banking or utilize your financial institutions mobile banking app to keep account information a few taps away. Or, enroll in text message banking and instantly check your balance with a single text!
Don’t let a spooky balance discourage you along your credit card debt journey. Lean on GECU and our wealth of products and services to succeed. From our low-rate credit cards to tools like Money Management, we have everything you need to get out on top! Not a member yet? You’re eligible if you live, work, or worship in select Ohio, Kentucky, and Indiana counties. Once you confirm eligibility, you can apply for membership online in minutes! We make it quick and easy so you can spend more time enjoying crunchy leaves, pumpkin spice, and entertaining scares with friends and family.