The average American carries more than $6100 in credit card debt. That may seem like a manageable amount, but when you add high interest rates, it can take a while to pay off.
If you’re deep in credit card debt, you have to figure out a way to pay off that debt. It impacts your credit score. Your credit score impacts your ability to find employment, get an apartment, or buy a home.
Do you want to learn how to pay off credit card debt faster and free yourself from financial stress?
Keep reading to learn the top ways to pay down your credit card balance.
1. Have a Target Date
You’re not going to get out of debt by just paying things off when you can. You need to have a specific goal and a date in mind to pay down your debt.
Set a date when you want to have all of your credit card debt paid off. You do need to make this date realistic.
2. Make a Plan to Hit the Target
You’re not going to pay off $50,000 in credit card debt in 6 months unless you win the lottery. What you can do is calculate your interest and balance.
You can then calculate how long it will take to pay off the balance at your current rate. Work within your budget to find a prepayment amount and a timeframe that works for you.
You can take a couple of approaches to your debt if you have multiple cards.
You can choose to pay a lot of your set budget to one card while paying the minimum on other cards. Once that one card is paid off, focus your attention on other cards.
You can choose the card with the lowest balance or the one with the highest interest rate to start with.
3. Pay More Than the Minimum
Look at your credit card bill. There’s a box that shows you how long it will take to pay down the credit card debt with a minimum payment. It takes years to pay down the debt with only a minimum payment.
Paying the minimum across the board doesn’t do anything to help you. You’re just paying for a bank CEO’s bonus with those added interest payments.
Look at your budget and your goals and see how you can do more than the minimum payment each month.
4. Consolidate Your Debt
If your credit is still in good standing, you can get a debt consolidation loan. This is a personal loan that helps you pay down your debt and have one monthly loan payment.
You have to be careful here because your credit cards will no longer have a balance. Where people get stuck in a vicious debt cycle is that they continue the spending habits that got them into debt to begin with.
Get a debt consolidation loan and hide those credit cards. Keep the accounts open because it’s good for your credit utilization score. Just keep them at a zero balance for a while before you use them again.
5. Get a Balance Transfer Card
Credit card companies are smart because they recognize when you’re in credit card debt. They’ll offer to keep you in credit card debt with an enticing offer.
They’ll offer a balance transfer card. This is a credit card that allows you to transfer your credit card balance to one card. The balance transfer cards usually have an introductory period where the balance is zero for 6-12 months.
Sometimes, this offer makes sense. The best thing to do is make a plan to pay off your debt during the interest-free period.
6. Consider Credit Card Counseling
Debt can be a highly emotional experience. It can add to the stress, anxiety, and even depression. If your debt overwhelms you, get help.
There are credit counseling and debt relief services that can help you manage your credit card debt. They can show you how to pay down your debt faster and lead a financially healthy life.
7. Work With Your Credit Card Company
Your credit card company is more than willing to offer more credit cards. They may be willing to help you pay down your debt faster.
How can they do that? You have to negotiate with them. If you’re a good customer with no late payments, you can ask your credit card company to lower the interest rate.
That turns your repayment strategy around because more money is paying down the balance as opposed to interest.
Explain to your credit card company that you want to pay down the credit card balance fast and a lower interest rate would help. They can lower the interest rate for a temporary period of time.
8. Get a Side Gig
You might look at your budget and can’t find ways to pay more than the minimum payment with your current income.
It’s hard to find the time and energy to find a side gig when you are already working 40 hours a week.
Do you have a hobby that you already put time into? You can find a way to monetize that. For example, are you a gamer? You can make and sell miniatures or start your own YouTube channel about gaming.
Photographers can sell their best images. Gardeners can sell flowers and vegetables. Find something that you can do that doesn’t take a lot of time and energy.
Take the money you earn and apply it to your credit card debt.
Learning How to Pay Off Credit Card Debt Faster
Hopefully, you learned how to pay off credit card debt faster. The tips in this article show you how to create a repayment strategy that is realistic and helps you manage your debt.
Doing just a few of these steps will help you pay your credit card balance down much faster.
Are you ready for more financial tips? Be sure to check out the other articles on this site!