Ways To Pay Off Credit Card Debt Fast
/Got credit card debt? If you have got a balance on one or more credit cards, particularly with high interest rates, and you are struggling with your credit card debt, it can be stressful. A lot of people are not quite sure of the best ways to pay down their credit card debt. But, there are many simple and helpful steps you can take to pay off credit card debt fast. For example, if you have some extra cash in your pocket, then you can increase your monthly repayments using that extra cash to pay down your balance quicker.
Other ways such as using a balance transfer credit card with a low or 0% interest rate period and asking for a lower interest rate on your current credit card can help you pay off your credit card debt fast. So if you are looking for ways to pay off credit card debt fast, here are some tips that will help you get out of debt quicker while saving money on interest charges.
The more of these strategies you can apply, the faster you will pay off your credit card debt.
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Create a plan
If you are looking for ways to pay off credit card debt fast, creating a plan to pay it off, is the first step. That is because it shows you where your money is going and expenses you can cut back on to save more money.
You can use a spreadsheet or even a pen and piece of paper to create your plan. In a nutshell, the basic steps to creating a monthly budget are:
Add up all of your monthly income to calculate your total monthly income.
List out all the things you spend money on each month, quarterly, and annually, and then calculate the total monthly expenses.
Subtract your monthly expenses from your monthly income to figure out the balance.
If your expenses are less than your income, you can use the amount you have left over to pay down your debt fast. You also can reduce your expenses and save that money to increase debt repayments by cutting down on unnecessary expenses.
But if your expenses exceed your income, you will have to identify expenses you can cut back on or cut out temporarily to spend less than you earn and save as much as you can afford.
Creating a plan can help you determine how much you can afford to pay on your debt each month. It will show you expenses you can cut down to save more money each month so you can apply that money toward paying down your debt each month and ultimately paying off your debt fast.
Pay more than the minimum
When it comes to ways to pay off credit card debt fast, make sure you always make more than your minimum payments on your credit cards. If you want to pay off your debt quickly, pay as much extra money as possible.
Only making your minimum payments each month will result in you taking years to pay off your balance. If you have some extra cash in your pocket, you may be tempted to spend it elsewhere. Instead, use that cash to make higher payments each month. Even an extra $50 that you put toward your credit card balances, will help pay down your debt faster.
By making more than your minimum payments each month, you will pay less interest each month while paying down your credit card debt quickly.
Pay off your most expensive debt first
If you have multiple credit card debts, one of the smartest ways to get out of your debt fast is to focus on clearing the balance off on the credit card with the highest interest rate first or the credit card with the higher balance. If you decide on the former, then all of your extra payments on paying off the debt that is costing you the most interest while making minimum payments on all of your other credit cards.
Once you pay off the most expensive debt, then shift your focus to the next most expensive credit card debt. Once you pay off this debt, you will free up more money. Continue this method until each of your credit card debts is paid off.
This method is known as the debt avalanche method. With this debt repayment method, you can save more money on interest while paying off debt quickly.
Ask for a lower interest rate
If you are looking for ways to pay off credit card debt fast, a great option is to call your card issuer and ask for a lower interest rate. If you have multiple credit card debt, call the issuer of the card with the highest interest rate first to reduce the rate on that card.
If you have been paying your bills on time and every month, chances are the issuer of your card will offer you a lower rate. If you have received offers with lower interest rates from other card companies, you can use this as leverage when negotiating for a lower rate.
By getting a lower interest rate, you can put the savings towards paying down your balance and eventually pay off the debt faster.
Use a credit card consolidation loan
A credit card consolidation loan can be the best option for you to pay off credit card debt fast if you carry balances on multiple credit cards. If you have multiple account balances, you can use a personal loan with a lower interest rate as a credit card debt consolidation loan that combines your multiple account balances into one loan with a single monthly payment.
As a note of caution: taking out a personal loan can be a slippery slope if you have not practiced discipline with your debt. Before taking out a loan to pay off your credit cards, have an honest conversation with yourself about whether or not you can manage the responsibility of a personal loan.
If you have a good credit score, you may qualify for a debt consolidation loan that allows you to use the funds from the loan to pay off your multiple credit card balances. Depending on the lender, a credit card consolidation loan can send payments directly to your creditors. Then you make a single monthly payment to the issuer of your personal loan.
Since a credit card consolidation loan offers a lower interest rate, you can pay off your multiple credit card debt fast while saving money on interest payments.
Use a balance transfer card
A balance transfer card lets you pay off your existing debt on one or more credit cards. Most balance transfer cards generally offer a low or 0% interest rate for a set period.
Once you get a balance transfer card, you can transfer your existing debt from one or more credit cards onto the new card. You then pay back the balance transferred to the issuer of your balance transfer card paying little or no interest during the low or 0% interest rate period.
You can also spend less money on interest payments if you can get a balance transfer credit card with a lower rate. You will generally need a good credit score to qualify for a balance transfer credit card. If you are struggling with credit card debt, you will get out of debt sooner with a balance transfer card.
Stop using your credit cards
One of the top ways to pay off credit card debt quickly is to stop using your credit card(s). If you are trying to pay down your debt fast, do not carry your cards with you because you may be tempted to charge it for unplanned purchases.
So If you are looking for ways to pay off credit card debt fast, you need to stop using them until you have paid all your balances in full. Keep your credit cards in a safe place and remove the card number from any shopping apps so that you cannot be tempted to use them.
Save your cash windfalls
One of the best ways to pay off credit card debt is to use your cash windfalls such as a tax refund, an annual bonus from your employer, a commission cheque, and other unexpected income to pay off debt sooner.
For example, if you get an income tax refund, you can use that money to increase your credit card debt repayments. If you get paid a bonus from your employer, save that money as well to put it towards your debts. So save your cash windfalls to put towards paying down your debt instead of splurging on them.
Whenever you receive a little extra money, put it towards your debts before you are tempted to spend it on something else. Even an extra $50 a month will help you pay your debt off fast.
Reduce spending
If you are struggling to pay down your credit card balance, look for ways to temporarily reduce unnecessary spending so that you can free up some money from your monthly budget and then use that savings to pay off your credit card debt fast by increasing your debt repayment every month.
Start by cutting spending on nonessentials each month. Then the money that you save can be put toward increasing your credit card debt repayments so that you can pay your debt off faster.
Here are a few simple ways to cut back on unnecessary spending to help you save more money that you can put toward your credit card balance:
Use a cashback app or site like Rakuten, Ibotta, and Drop when shopping for things you were going to buy anyway
If possible, buy a bike to replace your car as transportation
Cancel unused or rarely used subscriptions and memberships by using a service called Trim
Give yourself an at-home manicure or pedicure.
Cut the cable TV package and replace it with a streaming service like Netflix or Hulu to save money every month.
Take a look at the expenses category in your budget to identify what expenses you might be able to cut back on or cut out completely temporarily to free up extra cash in your budget and use that cash to pay off your credit card debt sooner.
Earn extra income
One of the best ways to pay off credit card debt fast is to increase your income so that you can put more money towards your monthly credit card payments every month to pay down your balances.
There are numerous ways to earn some extra cash these days thanks to the internet. Most of these do not require any experience. As long as you have the skills required to do them, you can do them to earn some extra cash. Whether you are working full-time or part-time, you can find ways to earn some extra money.
Here are some ideas you may be able to do to make extra money:
Offer freelance services - If you have any marketable skill that you can sell online, then you can do freelance jobs online to earn extra income each month. Sign up with freelance sites such as Upwork, PeoplePerHour, Freelancer, and more to start applying for jobs you can complete using your skills. Whether you have writing, proofreading, graphic design, video editing, SEO, social media marketing, translating, virtual assistance, or any other marketable skill you can sell online, you can make money as a freelancer.
Complete online surveys - One of the easiest ways to make some extra cash you can use to clear your debt faster is to complete online surveys in your free time. No experience or skill is required to do them. Typically, you will earn anywhere from a few cents to a few dollars per survey. Some sites pay up to $50 per survey. Sign up for as many high-paying legit survey sites as possible, such as Swagbucks, Survey Junkie, MyPoints, Vindale Research and Valued Opinions.
Tutor students online - If you have some teaching experience, or have good knowledge about a particular subject, you can consider tutoring students online to make money on the side. Join tutoring sites such as Tutor.com, Tutorvista, Chegg, and TutorMe to find tutoring jobs online.
Sell your unwanted items online - One of the fastest ways to make some extra cash is to sell your unwanted items online. There are many reputable sites and apps that will let you sell your stuff online, such as eBay, Amazon.com, Craigslist, Decluttr, Poshmark, thredUP, and more sites and apps. You can sell your old clothes, kids' toys, exercise equipment, appliances, gadgets, old furniture, and pretty much anything to earn some money.
Manage social media for others - Do you spend a lot of time on Facebook, Twitter, Instagram, or Pinterest? Then you may consider managing social media accounts and pages for other people to make some extra money as a social media manager.
Make money with your smartphone - You can use your smartphone to earn extra cash by doing simple tasks. There are a variety of tasks apps that you can use on your smartphone to make money. For instance, Gigwalk and Fieldagent apps will help you to earn extra cash by completing simple tasks online and in nearby stores.
There are tons of other ways to make extra money that you can put toward your credit card balance.
Check your credit report and score
Your credit score has a significant impact on how fast you can pay off your credit card debt. Your credit score is calculated based on the information held on your credit report. However, if your credit report includes any errors related to your credit history, your score can be lowered significantly, depending on the type of error.
So check your credit report at least once on a yearly basis to see if there are any errors in your report and correct any error that you find. Having a good credit history will increase your score. If you have a good credit score you will qualify for lower interest rates on your existing credit accounts or when you are offered new credit by lenders. By getting lower interest rates, you can save money on interest and use that savings to pay off your credit card debt faster.
Make your payments on time, every time
Any missed or late payments will not only increase your debt but also lower your credit score. If you miss a payment or make a late payment, your credit card issuer may also increase your interest rate because you are a higher risk to them. In addition to that, the card issuer will probably charge you late fees plus interest fees.
So, if you want to get out of your credit card debt fast, ensure you make your payments on time and every time to save money on penalty plus interest fees.
Automate your monthly credit card repayments by setting up a direct debit from your checking account.
In conclusion
As you have seen, there are many ways to pay off credit card debt fast. If you are struggling to pay your credit card payments, try one, some, or all of the above strategies to save money on interest while paying off your debt faster.
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Disclaimer: the content presented in this article is for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.
