8 Tips to Paying Off Credit Card Debt

6 Easy Tips For Paying Down Your Credit Card Debt

Credit Cards can be a blessing and a curse. Not properly managing them can lead to a world of frustration, high payments, and stress. . The average U.S. household, for instance, has more than $15,000 in credit card debt. Successfully paying off your credit card debt requires a hands-on approach, from determining your best payment strategy to contacting creditors to negotiate rates. Many people get into trouble with credit cards by originally not picking one with a good interest rate or APR rate. That is something that you should definitely pay attention to. Your credit worthiness will often determine that rate. A credit card’s interest rate is the price you pay for borrowing money. On most cards, you can avoid paying interest on purchases if you pay your balance in full each month by the due date.Sometimes missing just one payment can lead to doubling rate which will probably take twice as long to pay off the debt if only paying the minimum payment monthly. Before you swipe that card, make sure you think about what you’re using it for. Cash is king. If that is an option first, always try to use it. If you have to swipe your credit card, it would be best to pay off the balance every month .

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Here are some methods that may work for you. Remember your financial situation is specific to you. Not all methods will work for all. The ultimate goal is to be able to say goodbye to your credit card debt. However you choose to achieve that goal is not what’s most important, achieving that goal is of importance.

1. Make Frequent Small Payments– Even  if its just $5 it will add up over time. That way at the start of the next moth when your bill is due, it’ll be a lot less overwhelming. Making multiple payments over time will greatly reduce your total balance. Make this a priority. You have to budget as best you can to be able to make those payments and make them consistently. Being able to make more frequent small payments may mean sacrificing something small everyday. Bringing your lunch a few days a week instead of ordering lunch, making your coffee at home instead of Starbucks every morning, and eating one more dinner at home weekly instead of eating out. Over time these small things add up. You can actually use that money to pay towards your credit card debt.

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Debt snowball: The snowball method of paying down your debt uses your sense of accomplishment as motivation. You prioritize your credit cards by amount, focusing on the smallest one first. When you’ve paid off that card, you roll that payment into the amount you’re contributing toward your next smallest credit card, and so on. Like a snowball rolling down a hill, you’ll gradually make bigger and bigger payments, ultimately eliminating your debt.

Debt avalanche: Similar to the snowball approach, an avalanche approach swaps your priorities. Instead of paying off the card with the lowest balance first, you pay off the card with the highest interest. It tends to be a faster, and cheaper, method than snowballing. This method is helpful because at least you won’t be stuck paying the credit card with highest interest off for a longer period of time. Those are usually the cards that no matter how much you pay down, it seems like it’s not even making a big enough dent in overall outcome.

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Automate: Automating your payments is an easy way to make sure your debts are being paid so you avoid racking up additional costs in late fees. If you’re practicing a debt snowball or debt avalanche approach, however, you will have to be a little more hands on to make sure you’re contributing exactly what you want to each account.

2. Target one credit card at a time- When you have a lot of revolving debt, it can be very overwhelming. I suggest tackling one card at a time until you handle that debt. That doesn’t mean you should completely ignore one card over the other. Focus the bulk of your spending efforts on your smallest dent and then work your way up. If you focus on one card at a time, you can significantly reduce debt and pay off debt quickly.

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3. Pay more than the Minimum– Do some quickness’s calculations to consider paying more than the minimum. Try at all costs to pay in full monthly.  Try doubling your monthly contributions at first and see how it feels. If you pay the minimum only on your credit card bill, you can end up paying a significant amount over time in interest. Depending on your interest rate, this can really add up over time.

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4. Consider a Balance Transfer-This is a nifty little trick to buy some time. If you’re trapped under a high APR then this would be the method to go. Many cards out there offer 18-20 month 0% APR rates. Best of all they don’t have balance transfer fees either. Transfer the balance to a card with 0% and you can save yourself a lot of money over time.

 5. Pay in cash- Use cash or debit when available . That’s tangible money that you actually have it on you. It’s too easy to whip out a credit card these days no matter when you shop. Take the time to go to an ATM, take out the cash you need and then budget your spending based on cash on hand. You really don’t realize how much money you spend sometimes when you swipe your card multiple times. If you really want to significantly reduce the amount of credit card debt, you have to quite simply -STOP USING YOUR CREDIT CARD. Always  choose cash first. That way you know how much cash you have on hand and therefore how much you can and are able to spend.

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6. Reach out to your creditors and try to negotiate payment terms, such as advocating for a smaller minimum payment or lower APR. If you’re a longtime customer with a good track record of payments, a creditor may be willing to work with you. Explain your situation and the steps you might have to take. Remember that ignoring your credit card debt is not the answer. Reaching out to your creditors show that you are responsible enough to own the debt but need guidance in knowing how to do so. There are lots of life’s circumstances that can prevent you from being in the financial position to stay on top of your credit card debt. Everything from losing your job, unexpected emergencies, Covid 19, etc.Small changes might be just enough to help you get a handle on your debt, and the worst that can happen is they say no.

7. Request a balance transfer. A balance transfer moves a balance from a credit card with a high annual percentage rate (APR) to one with a lower APR in order to save money on the interest you’ll pay. Say you have a credit card balance of $5,000 and plan to pay it off in a year using either your high- interest credit card or a card with an introductory or promotional 0% APR on balance transfers for 12 months. The balance transfer offer can save you hundreds of dollars in interest.

8. Cut up your Credit Cards-Before you start thinking about charging more items and running it back up again, think of all the sacrificing and budgeting needs to get the balance down in the first place. Once you’ve paid off some debt its really easy to load your card back up with more purchases. DON’T DO THIS! instead, cut up that card. You really don’t need it! After all of your hard work the one thing you don’t want to do is get back in more debt. It’s always a sense of relief to be able to finally pay off that huge balance.

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5 thoughts on “8 Tips to Paying Off Credit Card Debt

  1. You have provided a lot of good options here. Any way you choose, paying off credit card debt is important to reaching financial independence.

    Liked by 1 person

  2. There are really great tips here, thanks for sharing! It’s so easy for debt to snowball once it’s there, and I feel like it can get tricky keeping up with so many cards.

    Liked by 1 person

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