9 tips to pay off credit card debt fast

9 tips to pay off credit card debt fast

Are you struggling with credit card debts and wondering how to repay them? You’re not alone. According to recent data, our population’s total credit card debt amounts to a whopping $856 billion! Many people develop innovative strategies to escape the debt trap, but to no avail. So, we decided to help. This article takes a quick look at nine tips from financial experts that can help clear your credit card debts quickly.

Develop a budget
Budgeting helps you make prudent decisions regarding how much to spend. Estimate how much money you have and pre-allocate funds to different needs. Many people use a budgeting app for this purpose. While it may seem too much of a chore to set up initially, it surely helps.

Pay the highest credit card interest first
Experts believe that it’s best to sort your credit card debts by ranking them in order of their interest rates: highest to lowest. Pay off the higher interest debts first while making minimum repayments on the rest of the credit cards. Once you’ve cleared the highest interest debt, move on to the second-highest one. Continue this process until you reach your goal.

Pay more than the minimum
Though paying the minimum amount due can keep the debt at bay for some time, it hardly makes you debt-free. This is because the interest keeps accumulating after the credit-free period is over. Pay more than the minimum credit card balance every month to make a substantial difference.

Resist credit card spending
When shopping, don’t pay for stuff using a credit card. This will ensure you stop piling up new credit card debts. It can be a challenge if you’re used to paying with a credit card. One way to resist the temptation is to leave those cards at home.

Get an advantage with deals
Actively look for deals, discounts, and freebies to avoid overspending. Also, check out offers on sample-sized product offerings, new launch trials, and coupons. Some programs offer discounts and free stuff on signing up, so check them out as well.

Look for potential debt consolidation
In simple words, debt consolidation means putting all your debts together and paying only one installment per month for all of them, that too at lower rates. Many banks offer debt consolidation schemes, making it easier to track your debts and repay them. For instance, you can combine your student loan with your credit card debts and pay one single payment per month for both. However, don’t forget to read the fine print and check your bills and statements for hidden fees when signing up for this facility.

Take advantage of a zero percent APR balance transfer
Do you have a credit card balance with high interest payable? If you’re confident of paying off this balance, you can transfer this debt to a card with a zero balance interest transfer. But be aware that you’ll have to pay off the debt before the balance transfer expires. Failing to do so can lead to a higher interest rate, causing a more severe downward spin.

Change your lifestyle habits
Careless spending often leads to the credit card debt trap. So, track how you spend money every day, every week, and every month for a few months. Look for where you can cut back; for example, are you buying latte daily? Are you eating out every other day? Can you take public transportation or join a carpool? Even minor changes will make a difference. You can use an expense tracking app for help.

Grow a second income stream
A second income can help manage unexpected expenses. It can also become something full-time. Even if it doesn’t, it will bring a few hundred dollars in on the side. However, keep in mind that income from a second source can be taxable.

Old habits are challenging to overcome, and it’s easy to slide back into them. Once you’ve paid off your credit card debt or have at least reached a better position, it’s important not to turn back. Don’t use credit cards for amounts you can’t repay or get a lower limit credit card. If you cannot handle a credit card, it’s best to stop using it altogether.