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Oct 26, 2018

Getting Out of and Avoiding Credit Card Debt

Getting Out of and Avoiding Credit Card Debt

Credit card debt is something we’re all aware of, and if we’re not careful it can get out of hand. There are many common habits that keep people in debt. Not paying your card off every month and continuing to pay the minimum, impulsive spending, not knowing the terms of your credit card (i.e. APR or penalty rates) and accepting too many credit card offers are just a few.

What most people don’t know is how serious credit card debt can impact our credit scores. So here are some great facts to know…

If you feel like some of this information applies to you, then keep reading. We have several practices that can help you eliminate credit card debt.

  1. Make sure your monthly charges do not exceed your take home pay and fixed expenses.
  2. Don’t only make minimum payments, and don’t max out.
  3. Make your credit card payments on time.
  4. If you’re looking to pay down debt, pay attention to your interest rate. It might be helpful to look at a consolidation loan to make debt repayment more manageable.

There are a lot of resources and apps available to help anyone who is trying to get out of debt. One resource that our Financial Planning Associate, Melissa Visbal, recommends is the book, Surviving Debt by the National Consumer Law Center. This book provides great advice on how to deal with debt in many areas such as which debt to deal with first, student loans, when and when not to refinance and so much more.

There are also apps, like Mint, that can help tack your spending and setting budgets. Specifically, with Mint, you can see where your money is going and get alerted you when you have overspent on a specific spending category. Of course, there are other apps out there like Unbury.me, Qoins, Debt Eliminator and Financial Goals that are extremely helpful. Do your research and see which fits your needs.

It is so crucial to be knowledgeable about your credit card debt. If you feel like yours is out of control, take steps to help it stop growing. Start with only using your debit card and avoiding your credit card. Then take inventory of your debts. Write it all down. Know what your interest rates are, your balance and the current minimum payment. Even though this is a little frightening, it will help you make informative decisions about your debt.

Getting out of debt and avoiding it, altogether, may be hard but it is possible and worth it in the long run. If there is anything you take away from this, let it be: spend less than you make. Most debt comes from poor financial behavior, so educate yourself. To move on from large debt and the consequences it incurs, is to avoid accumulating that much debt again in the future. Don’t get caught in a debt circle because once you’re in it, it is nearly impossible to escape.

Melissa Dotson, CFP®, CSLP®

Financial Planning Associate

Melissa came to Narwhal in the summer of 2018 following the completion of her master’s degree in financial planning from the University of Georgia, where she also earned her bachelor’s degree in consumer economics. Her interest in the field started with learning about consumer behavior, specifically its relation with complex moneymaking decisions. Melissa recently received her CFP® Certification in January 2021. Working with a CFP® professional can help you find the path to achieving your financial goals. Your goals may evolve over the years as a result of shifts in your lifestyle or circumstances such as an inheritance, career change, marriage, house purchase , or a growing family. Melissa is here to help you through that process. When she’s not working, Melissa enjoys cycling, cooking, and spending time with her beagle and two nieces.

Let’s start the conversation.

At Narwhal Capital Management, you’re more than just a portfolio, and it’s not all about the numbers. Let’s start with a meeting about your needs and future goals.