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3 ways to retrain your mind from getting out of credit card debt

Credit card debt It can feel like washing. Usually you throw a load into the washer when the obstruction is full. But sometimes – after a particularly busy month – your entire wardrobe is stacked on the floor and you avoid your eyes whenever you walk beside a mountain of clothing to avoid the pains of self-hate.

Religion often works in the same way. You spend a lot here, carry hiccups there, and soon you’ll have a pile of borrowed money that you can’t even remember how you spent. You may make mistakes that you do not know. These mind tricks will help you out yourself.

Opening note: The financial product ratings described in this article are independently determined by Wirecutter, a New York Times company that reviews and recommends products, and has not been reviewed, approved, or otherwise approved by any third party.

When faced with a large pool of debt, your first step should be to stop making the task more difficult.

One study, Published in the American Economic Journal, It was found that many borrowers who followed them could have avoided most of the benefits of credit cards, overdraft and late fees by moving debt from High interest cards for low interest cards, Or pay their balance with the money that they have in their checking accounts or by using a different credit card that has a sufficiently large credit line.

You can try Snowball, which is a personal finance manager Dave RamseyMy favorite way. The way you work is to pay the card first with the lowest balance and then move to the next lowest, regardless of the interest rate charged. This plan allows you to build a positive and bonhomie momentum as you work through your debt.

Another option is to devote your attention to the card with the highest interest rate, and pay that amount first. This tends to be people who prefer to think about mathematics because they end up paying the least amount of attention. apply for Balance Transfer Card, Which comes with a long period of zero percent interest, will give you additional time to pay off the debt.

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If you have debt on two cards, you will be more likely to pay a fixed rate (for example, 30 percent) of both cards, One study from the University of Chicago Baker Friedman series found the Institute’s working paper. Do not do this. You’ll take longer to pay off your debts, and you end up paying more attention to the process.

If you are the kind of person who considers it a point of pride that you will never give up on credit card bills, you may be more prone to misconduct when things get out of control, according to one of Study in the Journal of Marketing Research.

Let’s say that there is one very expensive month when the fridge explodes, you should fly to your cousin’s wedding in Alaska and the dog gets sick. You look at your statement, then your bank account and realize that you cannot change it. You will soon start buying things left and right, regardless of the consequences. After all, you are no longer a “responsible borrower” anymore, so you might have a little fun as well.

you are not alone. The same study found that carrying “a credit card balance tends to increase spending for relatively high self-control people”. Once the tunnel that controls itself fails to achieve its goals, they feel like failure.

With this failure comes permission to spend more and buy higher-priced goods than they usually do. “What is the effect of hell,” says Keith Wilcox, a professor of marketing at Columbia University’s School of Business and one of the newspaper’s authors.

Professor Wilcox said: “The more you overcome yourself, the more likely you were to spend.”

The paper found that you can relieve your despair if you feel that this mistake is getting worse. For example, increasing your credit limit makes your wandering debt seem smaller, and makes you feel better. Having $ 500 up to a maximum of $ 5,000 is easier to swallow than if you had a limit of just $ 1,000. By avoiding or reducing the spells of this blues, you are less likely to say “hell” and double your debt by purchasing this Madewell leather jacket.

Consider asking your card issuer to increase your threshold, although you may incur a small, temporary squash on the credit score. 2019 Compare It found that about four out of five people who asked to increase their bank credit limit were successful. And if you ask to lower your interest rate, you will get a good opportunity as well.

Finally, think carefully about whether this increase will send you more details. If you think it will, this method is not for you.

In a tough development, you are in danger of over spending in good times as well. a A separate paper was written by Professor Wilcox She found that when some people enjoyed promoting self-esteem from using social media, they were more likely to fall into credit card debt. Another sheetIt was found by professors Denis Zhang and Tat Chan of Washington University in St. Louis, and Professor Chenling Jiang of Georgia State University which published on SSRN, an open-access site for academic research, that requests for auto loans increased dramatically after people received a one-time bonus – As I did delinquency. We often encounter a problem when events conspire against us. (Equifax credit rating agency supported the research and provided the data, although the newspaper’s opinions are those of the authors only.)

To counteract this effect, consider dieting to get rid of your wallet. Commit to buying just what you need to live for a month, then slowly re-enter certain items (like movie tickets or new clothes) and see if they bring you happiness.

The benefit is that you will save some money that you can use to pay off the debts you previously collected.

That tingling of excitement in your stomach? This is joy, and you will feel that every time you think about your wallet stripped to complete a tidy locker.

Taylor Tipper is a senior writer at Wirecutter money. You can find it at LinkedIn, Twitter And Instagram.

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