Dripping water eventually wears away stone. Chinese Proverb

Do you cringe every time you look at your credit card balance which never seems to be declining? If you do, you are not alone and it’s time stop the madness. In part 1, I revealed some of my shocking discoveries regarding credit card usage on my own credit card journey. In part 2, I exposed at least 15 hidden fees associated with credit cards and how the industry often traps us and turn us into credit card junkies.  Review these articles by clicking Part 1 and Part 2.

In this concluding feature, I will seek to offer some recommendations to regain control of your credit card and if at all possible to get rid of it for good! Now the latter sounds fantastic but it’s going to take truck loads of discipline and proper management. If you are ready to become sane again, continue reading. Here are 10 tips to regain your sanity and take control of that credit card.

10 Tips to Regain Control

1. Pay the credit card balance in full each month: If at all possible, put all of your pay cheque on the card and use it to pay those bills that don’t require cash. If not possible, make purchases or pay bills for others using your credit card. Let them give you the funds. I did this at one stage and for years I had no monthly fees. This tip does not ultimately solve the problem but it buys you time and saves on penalties until you are ready to repay in full. Remember always think of the credit card as a loan which must be repaid and never borrowed again.

2. Avoid cash advance withdrawals – This comes with even more penalties (additional interest).
3. Reduce the credit card limit: This is one option which will make your monthly minimum fees lower if you cannot afford to pay it all off. It means that you need to get a lump sum of money and pay off a portion of the balance. Once you do write the bank/credit card company and ask them to lower your credit card limit.
4. Monitor your monthly interest payment, your billing cycle and your balance. This is to ensure that when you pay the minimum monthly fee and they charge the monthly interest payment, your credit card limit is not exceeded. I learnt the hard way about this. Avoid over limit fees. Take note of your billing cycle date and make sure your minimum payment is made before the next billing cycle date. If you have to use the credit card, make sure there is enough left on it to cover the monthly interest payment.
5. Make a plan to clear the credit card debt. Calculate how much the full credit card debt is and put it on paper where you can see it. Decide to pay a portion each month and not reuse the credit card until the balance is completely paid off. Upon final payment, return the credit card and do so in writing. To further motivate you, cut up the card if necessary while making the monthly payments. Although in this age of technology with online transactions, the physical card is not needed. However, cutting up the card will minimize spending and you help you resist the temptation to use the card when eating out or shopping in person.

Some ideas for paying off the card include getting an extra job, selling some things, throwing a partner, do a fundraiser etc to get enough funds to throw at this debt. Have a brainstorming session and see how you can earn extra income to help to clear this credit card debt. This may even sound crazy but you could consider borrowing from someone else who will not charge you interest and pay off the credit card while making monthly payments to this individual without the interest. The problem with the credit card is that even if you only pay a minimum each month, your debt is not being reduced. If you paid a minimum amount to a friend on the reducing balance, it would be more effective. It’s worth a try.

6. Spend only what you can pay for. If you have to use the card for business make sure you are spending what you can put on the card. In other words, the card becomes like a debit card and you will not incur more fees.
7. Get a Debit Master card. I’ve been using my Scotia visa debit card to make Amazon purchases and pay bills online instead of my credit card.
8. Use a credit card that has no annual fees. I don’t know if this is available in Jamaica but in the USA there are credit cards without any annual user fee. This means you only incur penalties if you are late or don’t pay back in full. However, if you don’t use the card, there is absolutely no fee to pay for retaining the card.
9. Use a card that is in your local currency. In Jamaica the US rate changes frequently and you stand to lose if your payment is in US dollars and you have to convert each month.
10. Get someone to hold you accountable. In the same way addicts need help to kick their habit, you too will need help. Ask someone trustworthy and who a bit stern to help you regain control. Don’t fold by filing bankruptcy or ignore the debt or worse yet keep paying the minimum for years like I have. That is madness because the balance is not being reduced. That’s free money. Don’t surrender! Dripping water eventually wears away stone. Make a plan and keep hacking at it! Eventually, it will be gone in 18-24 months if you work with killer intensity to clear it.

The Credit Card Debt Free Challenge

Let’s take a credit card debt free journey together! If you have credit card debit and are struggling, let’s take a challenge to become debt free in 18-24 months. Thus, by March 2018 you and I should be free. How much is your credit card debt? Mine is just under $3300. Are you ready to regain control and stop cringing? Let’s take the journey to freedom together! I look forward to writing again with good news that I am credit card debt free. I want to follow Ramsey solutions and do a debt free scream as well and post it!