Being in debt is never fun, even when it is so called “good debt”. The reason is because when we have debt, we know that we owe money which we are currently unable to pay. Therefore, we are not really financially free. A mortgage can be considered “good debt”. However, we are now talking about the wrong kind of debt, such as high interest credit card debt. This debt is expensive due to the high interest rates incurred on balances.
Out of control credit card debt can cause needless worry in our life. In fact, we can feel like we are in a prison with no way to escape. Scripture says “The rich rule over the poor, and the borrower is the slave of the lender.” Proverbs 22:7. Carrying the burden of debt can be harmful to our financial and spiritual progress. Instead of saving money, we end up paying interest on the amount borrowed. This money could have gone to our savings or investments had we not incurred debt in the first place.
The good news? With a firm commitment to change, and the necessary courage and perseverance we can turn our financial situation around. We can learn financial self discipline, which can also carry over into our spiritual life. Jesus wants us to be free, and He wishes to set us free from unnecessary inordinate attachments. When our financial house is back in order we will also have resources that can given back to God through supporting our parish or our favorite religious organizations.
Steps to get out of credit card debt
Stop using Credit Cards to make new purchases. Adding more to your balance will make it harder to pay down your debt since your new charges will accrue interest each month until you pay off the entire balance owed.
If you have multiple cards Make a plan to pay the Minimum Due on all cards each month, except for one card that has the highest interest rate. Pay as much as you can on that card each month to start drawing down the balance.
Call your credit card companies and ask them to reduce your interest rate. Be honest and tell the credit card companies that you have gotten into too much credit card debt. Also, tell the credit card companies that you want to pay off your debt and that you need their help to reduce the interest rate.
Transfer your balances. A good option might be to transfer your balances on higher interest rate cards to a lower interest rate card if the amount owed can be paid off within a shorter period of time (less than a year) .
Consolidate your debt. If you can get a loan to consolidate all of your credit card debt into one payment at a lower interest rate this will help you to reduce your debt faster. There are many places to look, try your local credit union, or your bank are good places to check with. Sometimes those with lower credit scores who are not able to get a bank loan may want to look into other ways to reduce their debt. Be creative and think outside the box and you might find a good solution.
Sell things you don’t need and use the money toward debt payment. Extra money made from selling extra clutter from around the house can be a double hitter. First, you are paying off debt and second you are decluttering your life and starting to simplify.
Learn to live more simply. If you learn to get by on less money, the money you don’t spend can help accelerate your debt payments and get you out of debt sooner. Once out of debt, you can use that money to setup an emergency fund and start saving for retirement and other goals, such as buying a house.
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