As many people know, it isn’t too hard to get into trouble when using a credit card. Having high credit card debt can hinder your mortgage approval chances.
When managed well, credit cards can be very helpful, but with an average interest rate of 19.99% if you start to let things slide your debt can increase faster than you can handle. To help you avoid this situation and better your chances for getting approved, check out three ways to lower your credit card payments below:
- Make a Plan: When you have a high amount of credit card debt, it can be overwhelming to face. The best thing to do is break it down into small pieces and make a plan for debt repayment. The two methods you can use to repay are the debt avalanche method or the debt snowball method. For the debt avalanche method you should focus on the highest interest rate regardless of what is owing and put any extra payments towards that. For the snowball method, focus on your smallest debt amount first and build up from there. A financial professional can help you set up your plan too.
- Find a Low Interest Card: It’s not impossible to find a credit card with low interest, and that may be a viable option for someone with a high debt. Although the rewards may be less with a low interest card, you will be able to transfer your balance from your existing card onto your new card, resulting in lower payments right away.
- Use Cash Instead: Sometimes the best way to reduce credit card debt is to go to the root of the problem: the card itself. Many people spend more money when using a card than cash, so if you want to keep yourself in check make sure to carry some cash for your daily purchases. This will greatly reduce your spending as you actually see the money leaving your wallet.
Now you know 3 proven tips to help you reduce credit card debt. With just a few changes, you can make a big difference and start down the path to being debt-free.
Contact me today with any questions and how I can help you find the perfect mortgage.