This July 4th, declare your independence from credit card debt.

The Fourth of July is all about celebrating freedom. The fireworks and parades are excellent reminders to consider how much financial independence you have. If you’re sick of dealing with credit card debt, there’s no better time to get started. Taking a closer look at the fundamentals of your finances is an important first step toward debt freedom, and Credit Sesame can assist you.

Determine your spending triggers and pitfalls.

Discover why you spend the way you do.

How do you make use of credit?

  • Do you use your credit card for every small purchase or save it for larger purchases?
  • Do you use credit because you want to earn rewards or because you don’t always have cash on hand to pay for things?

Consider how you feel when you use your credit card.

  • Do you treat yourself to a mini-shopping spree after a bad day at work?
  • Do you spend your money when you’re bored?
  • Do you shop for yourself or do you also shop for others?
  • Do you feel remorse or shame after making a credit-card purchase?

Your patterns can assist you in identifying the factors that cause you to use credit and thus increase your debt. Once you understand what causes your spending, you can work to control it.

Return to the fundamentals of budgeting.

Your budget is your ally. It’s intended to put you in charge of every dollar and how it’s spent. Your budget gives you the ability to direct how your money is spent in accordance with the priorities that are most important to you. If you haven’t looked at your budget in a while, or if you’ve never drafted one at all, it’s time to get serious and figure out what you’re really spending each month.

When you’re in debt, the first step is to add up how much money you have coming in each month and compare it to your financial obligations. This includes both necessities such as housing, insurance, food, and transportation, as well as extras such as cell phone service, gym memberships, new clothes, and entertainment.

Examine your spending habits over a period of time, such as one to three months, to identify your major money drains.

One of the simplest ways to accomplish this is to use a finance app that connects to your bank account and tracks your purchases for you. Some apps also allow you to link your credit card accounts so you can see how your balances have changed over time.

If you’re serious about declaring debt independence, the next step is to set aside money for repayment.

  • Reduce your unnecessary spending and eliminate certain expenses entirely.
  • Try to cut back on some of your fixed expenses. Consider taking on a roommate to reduce your housing costs.
  • Reduce the cost of your debt. This is where Credit Sesame comes into play.

To get a handle on your credit card debt, use the Credit Sesame dashboard.

As a Credit Sesame member, you have access to a personalized dashboard that includes credit and debt information. When you log in, you’ll see your free credit report card, which includes your credit score and a breakdown of all your debts, including:

  • Cards de crédit
  • Loans for students
  • Car loans
  • Mortgage financing
  • Loans for individuals

How does this assist you in breaking the debt cycle? There are two options.

  • First, you can see how much of your monthly income goes to debt, as well as the minimum payments for each debt.
  • Second, you can see how much interest you pay on each of your debts. If you examine your credit card accounts and notice that some have higher APRs, now is the time to look for ways to reduce the rates so that you can pay off the debt faster.

Credit Sesame can also assist you with this.

Credit Sesame recommends credit products that help you save money.

You’ll find ways to improve your debt situation on the dashboard. Transferring your credit card balances to a new card with a lower APR, possibly a zero percent introductory rate for a period of time, is one of those options. Based on your credit profile, your recommendations will show balance transfer credit cards that you might be eligible for.

Most balance transfer services charge a fee equal to a percentage of the transferred amount. It might be worthwhile because you could save a lot more money in the long run. Just keep in mind that you must finish your payoff plan before the promotional period ends, or the regular variable APR will apply to any remaining balance.

A personal loan to consolidate credit card or other high-interest debt is another option, and loan recommendations can be found on your Credit Sesame dashboard. A personal loan may have slightly higher interest rates than a balance transfer offer, but it is something to consider if you need a longer time to pay off the debt.

Create a system of checks and balances to ensure that you do not add to your debt in the future.

Finding your way to financial independence is a significant achievement, and you don’t want to go backwards now that you’ve made a dent in your credit card debt.

Leaving your credit cards at home is the simplest way to avoid a credit slipup. If you’re not comfortable going out without plastic, you can try a different strategy, such as requiring a 48-hour waiting period before making a purchase. The key is to set some limits for yourself and stick to them so you don’t add to your debt.

If you’re tempted to cut up your credit cards or cancel your accounts entirely, consider the consequences for your credit score first. Credit utilization (the percentage of your available credit limit that you use) accounts for 30% of your credit score. When you close accounts, you reduce your available credit, which may harm your credit score. You might benefit more from keeping those accounts open, especially if you still have balances on some of your credit cards. In addition, a portion of your credit score is based on the average age of your accounts, with older being better.