Credit card debt has the potential to get out of your control if you continue to delay or pay just the minimum amount. Not only do you pay high-interest charges on your outstanding credit card balance, but you also deteriorate your credit score. If you are overburdened with credit card debt and want to pay it off quickly, the following tips can help you a great deal.
1- Use the debt avalanche method
The debt avalanche method is a debt repayment strategy that involves making the minimum monthly payment on each of your credit card debts and then making the excess repayment on the highest-interest rate debt. The aim is to pay off the highest interest rate loan first so that you can save money on high-interest charges. After the highest interest rate loan is fully repaid, you can then tackle the second-highest interest rate loan in order.
2- Consider adopting the debt snowball method
The debt snowball debt repayment strategy involves repaying the smallest loan first and, after paying the smallest loan, tackling the larger loan in order. The benefit of this repayment strategy is that you gain confidence after completely repaying some of the loans. With the snowball method, you quickly pay off the smallest loans, so you have to deal with fewer loans, which makes managing and repaying the rest of the loans a lot easier.
3- Balance transfer
You can also consider transferring your existing card balances to a new credit card with 0% APR. Many credit card companies are willing to take your existing credit card balances and charge you introductory 0% rates for around 12 months. However, you should be wary of the balance transfer fees as well. Even with fees, the balance transfer option is often feasible as they save you plenty of money in interest charges.
4- Debt consolidation
If you have multiple credit card loans, you can consider taking out a new loan, usually at a lower effective interest rate than your existing credit card loans, to repay your existing loans. Debt consolidation makes managing your loans a lot easier as you have to deal with a single loan instead of multiple loans. You don’t have to remember the due dates of multiple loans, not to mention the money you save due to the low-interest rate on the new loan.
5- Pay more than the minimum
If you repay only the minimum amount on your loans, you will continue to accrue interest on the balance amount and push you deeper into the debt quagmire. To ensure that you pay your loans quickly, you should always aim to pay in full. However, if this is not possible, you should always aim to pay more than the minimum to avoid paying high-interest charges on the outstanding amount.
6- Review your spending
Credit card loans are directly related to your spending. This means that if you can control your spending or use your credit card less often, you will accumulate less debt and face less trouble repaying it. You should aim to use cash instead of your credit card, which will ensure that you buy only those items that you can afford.
Final Thoughts
Credit cards are useful tools but if you use them carelessly, you can land yourself in big trouble. You should always try to pay your balance timely and in full. If you can’t afford to repay a payment timely, you need to avoid using your credit card for making the purchase. If you follow the tips we mentioned in the article, you will face less trouble managing your debt.
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