Tax season is finally over; that’s a relief. While working with your accountant and reviewing your income and expenses, you may have discovered that you may be spending too much money. Not only that, but you may be spending too much using your credit cards.
Don’t stress; Camino is here to help you with advice on 3 ways to pay off your credit cards.
Create a Budget and Stick with It
We understand some people think creating a budget is as complicated as doing taxes. The truth is that creating a budget can be an excellent way to help simplify your finances and spending. It can help you reach your financial goals and alleviate stress. And it is not as complicated as doing taxes.
Creating a budget starts with knowing your net income. Don’t use your gross income or you could end up spending too much. Gross income is what employees earn before taxes, benefits, and other payroll deductions are withheld from their paycheck. Next, we recommend tracking your spending by organizing your expenses into categories. Start with your fixed or recurring expenses – mortgage payments or rent, car or lease payments, utilities, cable, internet, and streaming services.
Next, track your variable expenses that change month to month, like groceries, gas, and entertainment. That’s where you can prune your spending tree and turn it into more of a money tree.
Pay Off the Credit Cards with the Highest Interest Rates First
One of the quickest ways to pay off your credit cards can be to pay down the credit cards with the highest interest rates. Paying your highest debts first can be one of the fastest and cheapest ways to get out of debt. Why? You’ll save more money over time and you also decrease your debt faster because your interest fees will decrease as your debt decreases.
To learn more about switching to a lower interest rate credit card or applying for a loan to combine your credit cards into one monthly payment, contact a Camino Member Advisor today.
Pay More Than the Minimum Balance
Paying only the minimum balance on your credit cards can be one of the fastest ways to get buried in credit card quicksand. Although it can be important not to miss payments on any of your credit cards to avoid late fees, paying only the minimum payment won’t do you any favors financially.
It’s recommended to keep your overall debt-to-available credit ratio at 30% or less or your credit score can take a plunge.
Let Camino help you get out of the cycle of credit card debt once and for all.
Need Help with Credit Card Debt? Meet with a Camino Member Advisor Today!
Let Camino help with your options to best manage your finances and get out of credit card debt. We want our members to find the best option that works for them. Please go online at caminofcu.org, give us a call at 800-835-3400 to speak with one of our Member Advisors, or contact us for more information.