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With the right approach, you’re able to take control of yourfinancesand get things under control.
Stop Using the Card Immediately
You must stop using the card.
Seems basic, but its one thing people ignore again and again.
Consider putting a temporary hold on the card to remove the temptation of using it further.
Now is the time to get serious about a seriously tight budget.
Galici thinks you should focus on your credit utilization ratio.
When you max out your card, your credit score takes a hit.
This is because credit utilization credit used divided by total credit available makes up 30% of your score.
Focus on paying down your balance to get your credit utilization below 30%.
The key is to stick to your plan consistently.
Contact Your Credit Card Issuer
Dont be afraid to reach out to your credit card company.
While theres no guarantee, its definitely worth trying.
A lower interest rate or more flexible terms will help, so try your hardest to get it.
Explore Debt Consolidation Options
If youre juggling multiple debts, consolidation might be your next move.
Both features can yield much-needed financial relief.
However, Galici cautioned, Just double-check that you fix any spending issues that you might have.
Build an Emergency Fund
Wait, saving money while youre in debt?
The answer is: Yes.
It might seem counterintuitive, but its important.
Aim to save three to six months of expenses, Galici said.
If that seems overwhelming, start by saving $1,000 first.
Once youve accomplished that, then save up one month of expenses.
This allows you to build momentum while strengthening your finances.
With a healthy emergency fund, youll be able to cover unexpected expenses without relying on credit card debt.
Begin your journey toward better financial health by acknowledging your situation and what actions led you to this point.
This commitment is the first step in addressing your credit card debt.
To maintain your commitment, you gotta be on top of your money and whats happening with it.
Conduct some housekeeping by regularly reviewing and organizing all your financial accounts and documents, Barrow said.
And if all of this seems overwhelming dont worry, theres help.
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