Hey 2020, don’t let the door knock you on your way out.
This year in particular, there are many reasons – a lost job, illness, or boredom – that could have led you to create costs.
Let the promise of a new year come with a renewed determination to break free of expensive credit card debt. Check out these options to see what to do with your credit cards as we head into 2021.
What to do with your credit card debt before 2021
Wherever you find yourself on your debt journey – from a little help to wanting to cut up all of your credit cards (don’t do that yet …), we’re here to help you manage your credit card debt before the new year begins. Here’s what you can do:
Use the Debt Lasso Method to Pay Off Debt Faster
Ready to deal with that credit card debt? Consider the debt lasso method.
Developed by David Auten and John Schneider, also known as the Debt Free Guys, the debt lasso method is to convert your high-interest debt into a low-interest one so that you can repay the principal faster and for less money.
In this interview, Auten and Schneider told us everything about the debt lasso. You’ve figured out who can help the most – and who shouldn’t be using it.
No more plastic
Should you cancel your credit card if you are completely over plastic at this point? Could be.
There are many reasons to keep a credit card open – including credit rating, which can help improve your credit score. But there’s also a strong argument as to why you should close an account: you’re not trusting that you’re not over-spending.
If you are ready to give up plastic completely, then how do you get it canceled properly – you know, so that you don’t get overwhelmed with unexpected fees or find out three months later that the number has been stolen?
Here is our guide to canceling a credit card.
Stop using your credit cards – for sure
If you’re not ready to cut your cards into a million tiny pieces and just want to stop using them – and maybe use that time to pay off debts – we’re big fans of being less plastic.
However, if you do not use your credit cards at all, it can leave you in financial trouble due to financial problems. Think about lower credit scores due to inactivity and potential fraud.
Follow these safety precautions to protect yourself from the dangers of an unused credit card.
Ask for help
Perhaps you’re just in one tough spot – you’re having trouble paying due to a sudden job loss or a family emergency. Take a deep breath before you turn into credit card debt. Then please help.
The first phone call you should make is to your credit card company. Many offer credit card hardship programs as well as deferrals and extensions.
Never heard of a program like this? This is no surprise. Credit card companies typically don’t advertise that you can adjust your payment plan or stop paying your bill for a while.
Here’s how a credit card hardship program can help you through difficult times.
And we hope for a healthier, happier, and debt-free year in 2021.
Tiffany Wendeln Connors is an associate and editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.