How to pay off your credit cards debt

The number one financial problem is bad debt. You see, bank lend you money to buy the stuff that you can’t afford yet. For example, you borrow money to buy car, house, or to use the money as capital in your businesses. The problem rises when you misuse the financing facilities to buy the wrong stuff.

In this article, I am going to discuss the three most important things that may change your view about using credit card as a financing tool. Discover the three most important understanding that will help you cope with your credit card debt (if you have any)

Bad debt makes you poor

Rich people use debt to finance their assets purchase. That kind of debt is called good debt by Robert T. Kiyosaki. Poor people borrow money to finance their vacations, gadgets and all sorts of expense-generating possessions.

Majority of people finance their instant gratification on credit card. That significantly increases their spending which is on credit. Do it often enough, you will have trouble paying back the money you spent on credit card.

So the first concept you must understand is that it is fine, or even great to buy stuff with borrowed money, only if those are assets.

Delay gratification: make it into a habit

When you are deeply in debt, the most significant habit that you should cultivate is delay gratification. You see, when you don’t have a specific good habit, which means you are having the opposite bad habit. When you have the habit of wanting instant gratification, it means you don’t have the discipline to delay gratification.

The first step is to just cultivate a new habit. That is to delay all your wants, and luxuries. Don’t ever think of it if you are still in debt. You can’t allow yourself to keep spending money like there is no tomorrow.

Cut expenses drastically and get extra income

After getting into the new habit of delay gratification, it means that you no longer incur additional debt. Now you will need to find extra money to settle your credit card debt.

There are only two ways to have more money now. The first one is to cut your current expenses drastically. If you are living on RM2000 fixed expenses a month, cut it instantly down to whichever number you can live with. Start by 10% cut, then another 10% …and try slashing some items again when you are already in comfort zone.

By the time you had settle the outstanding credit card amount, you’ve already build yourself a new habit of living below your means.

At the same time, one further step to take is to find ways to increase your income. Effort is always needed to make more money. But it is worth the time you spend on it.

With all these extra money you find, you shall be able to make extra payment to the debt and got yourself out of the mess really soon.

In my MA$ course, I show how to have a debt paying system in place. You may be interested to find out more about it if you are having trouble with credit card debt now.