Many credit card holders mistakenly think they’ll be OK making minimum monthly payments, only to one day realize they’re on the hook for thousands of dollars in interest. Instead of remaining stuck in the revolving door of credit debt, consider taking out an alternative loan to pay off those debts and get back on firm financial footing.

Here are the three most compelling reasons we know to drop your credit card debt as soon as possible.

1. Large balances hurt your credit

Using credit cards for small purchases each month and paying them off right away can boost your credit score because it proves you can manage debt, but large balances do the opposite.

Lenders use your debt-to-income ratio to determine whether you are financially stable enough to take on new loans or credit lines. If you’re using more than 30 percent of your available credit and paying only the minimum payments, you appear as a risky borrower and chances of approval drop significantly.

Taking a loan to pay off high credit card balances is one way to regain financial control and improve your score. By paying off your high interest debt with a low interest monthly payment loan, you will be back to building positive credit and saving hundreds of dollars in interest, which leads us to number 2…

2. You will likely save money

Interest rates on credit cards can vary greatly, ranging from anywhere around 11% and skyrocketing up to 79.9% APR. While interest rates don’t affect those who pay off the card balance in full each statement period, they matter to many of us who unfortunately keep an unwanted balance on our credit cards.

Interest will accrue on top of your remaining balance at the end of the month and your outstanding debt will increase. This may be a small amount for those with minimal balances, but could add on hundreds of dollars each month for larger sums.

3. Credit card debt spirals quickly

Having one or two high-interest cards may seem manageable at first. But all it takes is one financial setback to become dependent on those cards and rack up serious debt.

It’s natural during significant moments in our lives to incur some amount of debt (emergencies, moving, pregnancy, etc.) But just as important as those moments are, it is equally important during those times not to spend frivolously.

“Paying off large credit card balances can really be a challenge, especially if you have multiple cards, payments, and interest rates with no end date in sight,” says Lisa Nestor, research manager at Payoff, an alternative lender that specializes in credit card debt.

Nestor recommends an “organize and optimize” approach to paying down cards, whether that’s using the snowball strategy to manage small debts and work up to the the larger ones, or the laddering method of tackling your highest interest accounts first.

Don’t be controlled by credit cards

Let’s face it, credit cards are a necessity in our lives but they don’t need to control us. Removing high interest debt will not only alleviate a major stressor in your life but can also save you money. It also increases your chances of being able to finance more important milestones — like starting a family, traveling , or buying your first house.

Alternative finance is a great option for those who have looming high interest credit card debt. By consolidating your cards into a potentially lower interest rate could save you money, help you save for the future, and build positive credit. However, this method may not be for everyone, it is important before taking out a loan to research the right course of action for your situation.   

If you’re interested in seeing what rates you would qualify for from these alternative lenders, check out this tool below and see your options:

3 Reasons to Pay Off Your Credit Cards Now is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

Was holiday gift giving a disaster last year? Did your Christmas giving go way over what you initially budgeted?  Maybe it was as simple as looking in the eyes of your adorable kids and your loving spouse and you just couldn’t say “no.”

Months later you’re still dealing with the aftermath of your Christmas giving and by the time you finished paying off Christmas 2014, Christmas 2015 is just around the corner. 

Avoid Christmas debt

Every time you look at your credit card statement you see that you’re still paying off your daughter’s Tickle Me Elmo. The question now becomes how do you manage your 2015 gift giving so that it doesn’t linger into 2016?

You have to actively manage your family’s holiday expectations. There are a number of ways to do this without killing the holiday spirit. How to do this? Here are three pain-free ways to manage your family’s holiday expectations:

• Schedule a family meeting and discuss what you would like the holiday to be like.  Talk to your loved ones about what is important to you in terms of what you would like to experience during the holiday. Would you like lots of little gifts, one big gift, a dinner party, or a trip.

• Talk about gift giving price limits, events you would like to attend, should everyone give one gift or three, white elephant gifts, or homemade? Having a half an hour conversation will create clear expectations and eliminate any negative surprises.

• Talk to your friends about your expectations for the holidays. They will most likely embrace anything that allows them to save money — but still have a lot of fun. Suggest alternatives to what you normally do. If you exchange purchased gifts suggest a gift-giving alternative or host a themed pot-luck.

• Set family goals and be clear about the role your holiday related savings plays in the bigger picture. If it’s not clear why you’re making these changes then it will be difficult for your family to buy into the idea.

Communicate Christmas expectations

The key to managing your family and friends’ gift giving expectations is to communicate. People aren’t mind readers and need a certain amount of guidance and reassurance about a change from the normal status quo.

Remember that it’s an ongoing process. Some of your family members will be resistant to the changes if at least the majority of your family is onboard it’s still a positive situation.

Remember that practice makes perfect. After Christmas talk to your family and friends to see what they like and disliked about how you celebrated the holidays. What would they change and how? Were they surprised by the outcome?

Finally, spend some time looking at your budget. Did you save money? Where were your highest levels of savings experienced? Was it food and alcohol because you had a budget? Or, was it in the gift category? How would you adjust your budget so that next year you can experience an even higher level of savings?

Taking time to ask these questions and examine your results will help you have a fun and relatively stress free holiday season.

This post on Christmas gift expectations was written by Michelle Jackson, a personal finance and lifestyle blogger sharing her story at The Shop My Closet Project. Her goal is to help people cultivate their best life. When she’s not blogging or podcasting for Girl Gone Frugal you can find her riding her bike, going for coffee, or hiking in the mountains.

Managing Christmas Gift Giving Expectations is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

Where has the year gone? Christmas is approaching faster than you think, and have you begun your holiday planning yet?  Are you freaking out? Don’t, there is still enough time to plan a debt free and joyous holiday season.

Here are five steps to for the last minute holiday planner who doesn’t want to go broke and be in debt.

Create a plan

Take time to create a plan for the holiday season to avoid debt. Do you want to have a big blow out party?  Or a cozy gathering of friends? Would you like to give gifts to a large number of people or a small group of friends?

Taking time to plan helps to create clarity and a framework for upcoming holiday gift giving and festivities.

Set a budget

Spend time thinking about what you can afford, set your budget and stick to it. Setting a budget makes it clear to you what you can and cannot afford.

Once you set your initial budget cut it by 25 percent just because you can and maybe should.

Use cash

If you set a budget and spend using a credit card that defeats the purpose (unless you pay it off immediately and get mileage points). Once your budgeted cash is spent — you’re done.

For example if you have a $1,000 budget for gift giving and dinners, take time to figure out who is getting what, how much you think your dinner party will cost and be honest about what you will actually spend so that you won’t go into debt.

Don’t buy new clothes for holiday parties

Do you find yourself invited to a number of holiday parties every year? Look in your closet and see what suits/cocktail dresses/etc. that you already have and repurpose those items. People typically don’t remember what you wear.

Use what you have

Double check your holiday decorating stash-Don’t spend money on items you already have. If you enjoy Thanksgiving decorations, Christmas sparkle, and New Year bling around your home look at what you already have to avoid duplicate purchases.

Spend time double checking your sparkling lights, your ornaments, and left over wrapping paper that you will be able to use that season.

Make staying out of debt a goal

Spending a couple of hours going through your closets, setting a budget, and creating a plan will take out a lot of the anxiety that many people experience when planning and preparing for the holiday season. Ultimately, the holidays are about spending time with family and friends, potentially eating too much food, and giving to those who are less fortunate than you. It’s not about going into debt.

Finally, embrace your creativity to craft a beautiful and memorable holiday season. There are so many ways to spend time with family and friends without spending money.

Go for a walk in the park, ride bikes together, host a game night, throw a potluck, have a holiday sweater night, set up a homemade photo booth, and the list goes on.

If you’re not the most creative person in the room, go to Pinterest for inspiration. You will find information ranging from how to decorate creatively, tips to save money, and more.

There is no reason to go broke or into debt this holiday season — even if you started late. Good luck!

This post was written by Michelle Jackson, a personal finance and lifestyle blogger sharing her story at The Shop My Closet Project. Her goal is to help people cultivate their best life. When she’s not blogging or podcasting for Girl Gone Frugal you can find her riding her bike, going for coffee, or hiking in the mountains.

Preparing for a Debt-Free Holiday Season is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

I did have student loans and some credit card bills that took me a few years to get rid of — but that was right after graduating from college, and admittedly they weren’t for vast sums and weren’t extremely difficult to pay off.

Other than a home mortgage and a credit card bill that my wife and I pay off each month as we earn credit card reward points for hotel stays, we live a debt free life.

There are some life choices I made early on, along with some debts that made me rethink how I think of money. Here are some of them:

Borrowing little for student loans

Paying for college gave me an early view of potential debt in many ways. I purposely picked an in-state university to go to because it was cheaper than going to college out of state, and I worked as much as I could in the few years before starting college so I could afford it and wouldn’t have to work during college.

My parents paid half of my college costs, so that gave me a big start in trying to graduate debt free. I worked on campus during the end of my sophomore year and my entire junior year to help pay for expenses, but the pay was so lousy that I had to take out a student loan to make it through the last year or so.

I didn’t borrow much — I don’t remember the exact amount but I’m sure it was less than $5,000 — and unfortunately I graduated with debt.

Like most grads, I didn’t have a high paying job and it was difficult to pay off my student loans. I couldn’t afford to go out to bars or nightclubs with friends when I wanted to, doing everything I could to pay off my debts. Within two years, I had paid off my student loans and was debt free — for awhile.

A low income

This may sound like a simple reason to avoid debt, but it often leads to debt: Not earning much money.

While many people may use their credit cards more to pay for a lifestyle they can’t afford, I made a conscious choice not to use credit cards too much because I knew I didn’t have the income to pay the bills when they came due.

This isn’t to say that I didn’t use credit cards unwisely — I’ll get to that in a minute — but as a journalist who recently graduated from college and wasn’t making much money, I knew I already had to be frugal on my low salary. I guess if I had an income double of what it was at the time, I may have had more room in my budget to play around and go into debt because I was sure my monthly bills would be paid.

But when you’re unsure if you can pay for groceries, rent, car payment, student loans and other household bills, it somehow makes throwing money down on non-necessities a lot more frivolous. Being debt free, I discovered, was a little easier if I didn’t have money to begin with.

Too many bar charges

A monthly credit card statement can be sobering. I don’t mean this as a pun, but seeing line after line of bar charges on my credit card bill in the first few years after college was a sobering reminder that I was wasting my money.

I was using my credit card to keep up with friends who were better off than I was financially, and I had to put an end to that for a year or so while I got my credit card balance back in check and vowed to live debt free.

A major car repair bill

One of the biggest things that got me thinking about how much nicer it would be to live debt free was when I had to take my car in for repairs and I didn’t have enough money to pay the final bill.

The bill was so high that I had to call the credit card company to ask for my spending limit to be raised. It was and after spending about a year paying that expense, I vowed to live debt free. I never again wanted to be forced to have to pay interest for something that I could have saved for and paid off entirely at once.

The road to debt free

After that expense, I slowly started funding an emergency fund to pay for car repairs and other emergencies that come up in life as a way of meeting my goal to be debt free.

I’ve sometimes had to use a credit card anyway to pay for a necessary expense — but that’s the main point, that even the credit card has been used for emergencies only and only when they’re necessary. No more bar tabs to throw on a card.

Using a credit card to pay for a car repair is a rarity, and one I’ll usually only do so I can earn reward points and already have the money in an emergency account to pay the credit card bill in full when it arrives.

That emergency fund has led to creating other funds for other purposes, including our daughter’s college education, vacations, taxes and home repairs. It’s all part of a plan to live a debt free life, which is a lot easier when you aren’t using credit cards to pay for everything you see.

How I Chose to be Debt Free for Life is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

I’ve never been in major debt in my life, mainly for one overriding reason: I don’t like the idea of owing anyone money.

I’m in favor of good debt — such as getting a mortgage to buy a home, or a student loan to attend college, up to a certain point — but owing a company or someone money has always left me with a nagging feeling. I’m even happy to pay an annual fee for my rewards credit card so my family can use the reward points for free hotel rooms during vacations — but only because we pay the monthly bill off on time and don’t pay interest.

Here’s an example of how crazy I am about avoiding debt, even though it was only $20 from a friend:

In August I went with my daughter to her middle school for orientation, which included buying gym clothes. I mistakingly thought a credit card would be allowed to buy the items, so I left my checkbook at home and didn’t bring cash.  When I found out that only cash or check were allowed, I borrowed $20 in cash from a friend who was there with their daughter so that I didn’t have to return to the school and buy the stuff later.

A few hours later, I made a point of going to an ATM to withdraw $20 and deliver it to my friend. It was an obligation I wanted to fulfill that day, partly because I wanted to thank them for the quick loan, and also so I wouldn’t forget to pay them later.

My point is that even with a small amount of debt between friends, debt can be a bad habit that can easily get worse before it gets better.

Saving for a nest egg of debt

I have a desk calendar from The Onion, the satirical news site, and a recent entry had this headline:

“Couple Has Nest Egg Of Debt To Make Sure They’ve Got Some Money To Owe Down The Road.”

Beneath it was a short, funny story about a couple always having debt that will “hopefully provide us with a nice chunk of debt we can dig into later on if we happen to run into any unexpected prosperity.”

If they stuck to their debt plan, “they would have enough outstanding payments stashed away to not only retire in debt but also to ensure that their children could inherit some of their debt as well.”

While it’s just silly satire, The Onion story makes a few points that really stand out for me:

Debt hinders prosperity

Saving a “nest egg” of debt for retirement sounds preposterous, but it’s what some people are essentially doing by allowing themselves to be in debt as they prepare for retirement.

Think about what you could do if you did’t have debt to deal with. Yes, you could easily spend it on more things — clothes, dinner out, a new car, travel — or you could allow yourself to be prosperous.

With debt, any unexpected prosperity that does come along — such as a bonus at work, tax refund or an unexpected new client — will put a cloud over the extra money that just came your way. Paying off debt with such a bonus is a smart move — but not having that debt when a bonus comes around could lead to a lot more prosperity down the road.

Don’t give debt to your kids

Debt can’t be inherited, so that isn’t something to be worried about. Your hospital bills at the end of your life don’t have to be paid for by your heirs.

But constantly trying to tackle debt and taking on more debt is a lesson you don’t want to teach your children.

It goes back to the idea of hindering your future prosperity by always having debt. It can be a constant struggle to get ahead in life and have the money you need to improve your life if you’re always taking on more debt.

I bought three websites this year to help me earn some passive income, and I vowed not to buy more websites until the ones I have are profitable. I’ve had an opportunity recently to buy another site that should lead to some decent passive income, but I’ve followed by own advice and decided not to buy until I’m out of the hole with the other sites, including this one.

It’s debt I could probably afford, but I want to continue paying myself back for the outlay for the other websites until they’ve paid for themselves.

No one seriously grows their debt so that they’ll be in debt during retirement, but that’s essentially what people are doing by taking on more debt and barely paying off their debt when they’re young and working.

If that doesn’t put a sinking feeling in your gut, as it does mine, try imagining your retirement every time you pull out your credit card.

How Debt Sets You Up for Failure is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

And that’s probably the first real piece of advice for eliminating personal debt. It is a long road. And if it is a carefully thought out road, it can still be an enjoyable, stress-free one.

For a lot of folks, they’ve been carrying debt longer than any relationships in their lives; even longer than spouses or kids. So break out of the mind-set of living in a hamster wheel, and start doing something positive to begin breaking it down. Here are five steps to eliminating debt:

Think in Time

Whenever you’re about to lay down $10 on your third XXL skinny latte for the day (or any expense that’s border lining on indulgent), ask yourself – how much time will it take to earn this back? And don’t just quantify your purchases by your hourly wage, hold them up to what you make after taxes. If you’re honest with yourself, you will likely spend less on frivolous, excessive purchases.

Another cost to think about when you’re factoring time > money is your daily interest rate. How much interest are you currently paying on all of your debt? Divide it by days in the month and consider it, too, when you plan to purchase something you may not really need that much.

Gamify your Personal Debt

Track your expenses and pay attention to victories, no matter large or small. Give a small percentage of the debt you’ve been able to pay off back to yourself.

Cut the Right Corners

Whenever you receive money or break a larger bill at the store, take that change and save it up monthly to put toward your debt. You’d be surprised how much you can put toward rent without every really noticing it was missing.

Be Tomorrow You, Today

Mind-set is 99.99% of getting through debt – and a good outlook that’s framed by the realization that debt isn’t a physical constraint, but a mental one can go a long way.

When you’re carrying a burden in your mind, it’s easier to see life as half-glass-empty. Whereas if your outlook were more positive, you may be more likely to see opportunities as they present themselves and be open to change.

It’s easier to manage risk and reward when you’ve got a clear head, so put a plan in place for those bad credit personal loans you’re paying off and then forget about it. Paying your debt down can be automatic while you get on with your life.

Find a Partner (or a competitor!)

Fans of CBS’ popular Dexter series will know that every serial killer loves a little competition to keep things interesting. Well, in this debt-slasher epic – you’ll probably have more motivation to cut costs and stay on task if you have someone around who’s doing the same thing.

Having someone to talk to along your debt-killing spree will also inspire you to get creative and try new ways to cut costs and stretch your existing budget.

Look at your debt for what it is; real life Tetris, nothing more. It needn’t rob you of life’s joys, and it certainly need not weigh you down. Consolidate, plan, and move on!

5 Easy Steps to Eliminating Personal Debt is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

Getting a raise, a promotion or a better job will all seem minor if you’re buried in debt. But once you get out of major debt, you’ll see things in a whole new light. Suddenly, the money you’d normally put toward a credit card bill or help pay off a student loan or a car loan is your to do with what you want.

A new app called Pay Off Debt helps accomplish this new insight by using the debt snowball method to pay down debts.

The app encourages users to pay off debt by showing them that no matter how big their debt is, they can tackle it and eliminate it over time.

What’s a debt snowball?

A debt snowball works like this: You make the minimum payment to all debts except one — usually the one with the lowest balance. You then pay the minimum payment plus as much extra payment as you can to one debt. This process is repeated until all of your debts are paid in full.

Debts can be paid with the debt snowball method in any way you choose, but the most insightful way is to pay off the lowest balances first, even if they have the highest interest rate. You’ll see immediate results with the app and will continue to be motivated to pay off more debt, even though it makes more sense to pay off the highest interest rate debts first.

Instead of spreading out any extra payments to all of your creditors, such as $20 more to five credit card bills, you make an extra $100 payment on the lowest bill so that it will be gone quicker. It’s a debt snowball in action.

As credit cards are paid off, that gives you more money each month to pay off another credit card, until they’re all paid off.

Pay Off Debt app features

The Pay Off Debt app lets users organize their debt snowball however they want. They can start with the lowest balance and move to the highest balance, or from the highest interest rate to the lowest interest rate.

Progress bars show how the entire debt snowball is moving, such as with an estimated time left to pay off each individual debt.

The payment history for each debt is recorded, and payments are easy to record and change.

You can also turn off the snowball to see how long it would take to pay off all of the debts if you weren’t using the debt snowball method.

What does Add Vodka get out of this? If you buy the $5 Pay Off Debt app with our affiliate link, we get a 30 percent cut. It’s a win-win. You get a great app to help you use a debt snowball, and we get some cash to help us afford to continue writing here.

Let us know what you think of the app in the Comments section.

An App to Build a Debt Snowball is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.