Paying down credit card debt

Tips To Pay Off Your Credit Cards Fast

Credit card debt is very easy to get and extremely hard to get rid of. If all your cards are charged up and your goal is to be come debt free, you have a lot of work ahead of you. You are going to need to employ every trick in the books to get those cards paid down. Here are a few of the top tips that will help you melt that debt away.

Credit Card Debt

Because of the high interest rates and the ease at which debt seems to build, paying off credit cards can be extremely tough. If you are ready to get rid of this debt, once and for all, we can help. Here are some simple tups and some strategies that you can use to pay those cards down.

1. Make Your Payment Early

Make your credit card payment just as soon as you get it. The quicker that you can reduce your debt, the less interest you will pay. Every extra day that the money is on your balance, it is collecting interest.

If you pay your bill electronically, you will usually be presented with two options. You will have to check off whether to pay the bill today or on the due date. If you have the funds in your account to cover it, always select the pay today option.

Paying your bill a few days early every month might not make a huge difference but it helps. Every dollar that you save makes a difference to how soon you get out of debt. Plus, it reduces how much money that the credit card companies make, they make enough.

2. Pay More Than The Minimum

I am sure that you are aware that paying just the minimum charge on a credit card is a bad idea. You know that it will make it take longer to pay off the debt, but you might not realize just how much of an impact it can make. Paying just a few extra dollars can dramatically cut the time it takes to pay off your debt and the interest that you ultimately pay.

Let’s take a credit card with a balance of 5000 dollars at 20% interest. If you paid just $100 a month, it would take you 109 months to pay off the debt and you would pay $5840 in interest.

If you increase that payment by just $10 a month, it changes the picture quite a bit. Paying $110 a month will allow you tp pay off this same debt in 86 months and you would pay $4430 dollars in interest.

By increasing your payment just ten dollars, you cut 23 months of payments and would save $1410 in interest.

3. Employ A Strategy

There are two basic strategies that you can consider when paying off your credit cards.

First, is the logical approach or the debt avalanche method. This method concentrates on getting rid of the highest interest debt first. It makes the most sense to pay off the credit cards with the highest interest rates first. In this way, you will be paying less interest overall and will maximize your money.

If you take this approach, pay the minimums on every credit card except the one with the highest interest. Pay as much as you can on this one, even going as far as making multiple payments a month, every time you get paid.

Once you have paid off the highest interest card, move on to the next highest. Repeat this process until all of your credit card debt is gone.

The second approach will work if you need a bit of extra motivation. It is called the debt snowball method. With this approach, you will pay the minimum payment on all of your credit cards except the lowest balance one.

Take your lowest balance card and pay as much as you can on it until it is paid off. Then, move on to the next lowest balance card and repeat the process.

The great thing about the debt snowball method is that it will help you stay motivated. Because you will see credit cards completely paid off quicker, you are more likely to stay on the path. It can be frustrating trying to pay down a high balance card because you never seem to get anywhere. This method takes that frustration out of the equation

4. Take Advantage of Balance Transfers

If your credit is good enough to take advantage of credit card transfer offers, you should take full advantage of them. Even if it means taking on more credit, you just need to be disciplined.

If you get an offer for 0% or even a low single digit interest rate, transfer the balance from one or even two high interest cards. Then, you can pay off the debt much faster using the period of zero interest.

You can use balance transfers repeatedly to drastically reduce the interest that you pay and cut months, if not years off the time it takes to pay down your debt.

Credit Card Quick Tips

Here are a few quick tips that you can use to pay down your debt and protect your credit.

  • Do Not Close Credit Card Accounts
    You might be tempted to close a credit card account when you pay it off, but this could prove disastrous. Closing a credit card will reduce your available credit, raising your credit utilization. This would likely result in a credit score decrease.
  • Cut Up Your Cards
    You need to stop putting more debt on your cards and it is far too easy to do. Stop treating your cards like a payday loan and just cut them up. At the very least, stop carrying them with you.
  • Erase Your Credit Card Numbers
    If you have credit card numbers stores on your computer, phone or online stores, delete them. Make it so that you would have to manual enter a card number. It gives you more time to reconsider unneeded purchases by eliminating one click pay.
  • Use Windfalls To Pay Off Debt
    If you get a big windfall of money from a tax refund or bonus at work, take advantage of the opportunity by making a big payment on your credit cards. It is money that you were not counting on, so put it to good use. At the very least, use part of it for your debt. If you receive a 1500 dollar bonus, put 1000 dollars on your card and treat yourself, guilt free with the rest.

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