Do you feel like your credit card debt is so far gone you’ll never get rid of it? Well, you shouldn’t. There are concrete things you can do to rid yourself of your financial woes, though some do take longer than others.
Here are the fastest ways to pay off credit card debt.
With this method, you make minimum payments on your delinquent accounts, then use the rest of the funds you have set aside for debts to erase the debt with the highest interest rate. After that, you’ll deal with the next-highest rate, and so on until your debts are vanquished.
You’ll save the most with in interest with this method, which also decreases the amount of time to become debt free.
How it works is, say you have $3,000 left over monthly for debt repayment. Also, you owe ten grand on a credit card with an 18.99% APR, $9,000 on a car loan that carries a 3% interest rate, and $15,000 on a student loan with a 4.50% rate.
Using the avalanche method, you’d first clear your credit card balance, then pay off the rest of your debt in descending order in 11 months, shelling out $1,011.60 in interest.
This method is the flip side of Avalanche, in that you first pay off the card with the lowest interest rate. This gives you a jolt of mission accomplished and the motivation to keep going. After you’ve made quick work of that first card, tackle the next smallest debt then rinse and repeat until your entire debt is vanquished.
You’ll need good credit for this financial strategy, which involves applying for one of those 0%-interest balance transfer cards that companies occasionally issue. If you can get one, you can shift your high-interest credit cards onto it. However, you need to be certain you can pay the new card off before the interest rate goes back up, in about 12 to 18 months. This method makes it easier and quicker to wiggle out of high-interest debt.
If you’re eligible for one of these cards, by the way, you likely also can qualify for a debt consolidation loan which you can use to pay off your high-interest debt, leaving you with just that loan to pay off. For more info go to credit card debt consolidation near me.
Put Some Cash Aside
This may sound counterintuitive since you’re trying to put any extra cash on debt, not save it. But having an emergency fund keeps you from having to whip out the plastic whenever an unexpected expense crops up, as it always does. You’ll never get out of debt that way, not for long, anyway.
Aim for a fund of at least $1,000 at first while making only minimum payments on your cards. After that, you can begin focusing on your obligations.
Rein in Spending
This is a must if you expect to get out of debt and stay out. To see where your money is going, you seriously need to make a budget that accounts for necessities, monthly debts, dining and entertainment, and irregularly recurring expenses such as travel, insurance, and vet bills.
After you have delineated your expenses, look them over for ways to free up sufficient cash monthly to pay off all your debts within 12 to 18 months.
Now you know some of the fastest ways to pay off credit card debt. Plenty of options, eh? All you must do is get started, then stick to the plan.