There is nothing worse than being heavily in debt. It can be quite stressful and frustrating. Debts accumulate fast especially with sneaky credit cards. The problem is people often forget that the money on their credit card is not their money. When you think you’re about to pay all your credit card debt, you buy new items and burden yourself with more debts. Eventually, you find yourself caught up in a vicious cycle of spending, paying, and spending some more. Interest rates and your spending habits put you in a bad situation, but you can do something about it. In this post, we’ll discuss how you can pay your credit card debt faster. Let’s see the 10 most useful tips. The last tip is the best tip. Click here to read it first.
1. Reduce the amounts of money you spend
One of the best ways to pay your credit card debt fast is to stop accumulating new debt. Look at your budget and decide what is a must-have and what isn’t. Ask yourself before getting your credit card out of your wallet whether you really need this item or not. This way you pay only for essentials.
2. Know where your money goes
To save money, it’s very important to know where your money goes. Create an Excel sheet and write what your monthly payments are and include essentials like rent, electricity and gas bills and any non-essential items. Only when you know where you spend your money, you can be aware of any saving opportunities.
3.1. Understand interest rate
Most people don’t really know or calculate how much they are actually paying for an item when they use their credit card. An item that costs only $1000 can end up costing you $3000 with interest rate if you’re not careful. Always bear this in mind when you decide to pay with your credit card.
3.2. Pay more than the minimum
When most people pay for credit cards, they pay the minimum amount only which can feel like a good idea on the short term because it gives them the freedom to spend the rest of their money as they wish. We recommend that you always pay more than the minimum. This means that you finish your payments in less installments and pay less interest fees.
4. Try the debt avalanche method
If you are paying debt for all your credit cards, you should prioritize your payment. It’s always better to pay your credit cards with the highest interest rate first because if you think about it, the more time it takes you to pay a highest interest rate card, the more money you’ll pay on the long run. So, pay high interest rates cards first and get it over with.
5. Switch to cash
The problem with credit cards is that people don’t realize how much they are spending. If they don’t see the amount of money coming out of their pockets, they will think that they didn’t spend that much. A great way to limit your spending is to switch to cash. This way you’ll be forced to pay for items that you can afford.
6. Cancel subscriptions to services you no longer need.
While this sounds like something all of us should already be doing, you’ll be surprised that most people forget to cancel subscriptions for services they no longer need. Are you still paying for that old antivirus subscription after getting a completely new laptop? Did you add your credit card number for a free trial for a service you no longer wish to use and forgot to cancel? It’s time you check your credit card statement and know what unnecessary subscriptions are costing you money and cancel them right away.
7. Money transfer credit cards
Money transfer credit cards are amazing. They can help you reduce interest rate or eliminate it altogether if you pick the right transfer credit card for you. The idea is to use the transfer credit card to pay your existing credit card. Some transfer credit cards offer low interest rates or no interest rates for a limited period. You pay transfer fees. Before using a money transfer credit card, you should check the transfer fees, the interest rates they offer to see if it’s going to save you money on the long run. Check various cards to use the credit cards with the best interest rate.
8. Sell old or new unused items
Sometimes, no matter how much you plan, you just need extra cash to pay your credit card debt. You should consider selling any old or new unused items. You may be surprised at the extra cash you could get by simply going over your stuff and selling items of no value to you but of great value to someone else. Items you could sell are old cellphones, laptops, etc.
9. Look for new sources of income
If none of the above works for you, you could try to look for new sources of income. There are several things that you could do beside your job. You could try freelancing on the side, babysitting, or even food delivery. You could check online for more ideas on side gigs you could do on your free time to generate money and pay your credit card debt. You’ll most likely find something that is suitable for you.
10. Seek help and get credit card counseling
Sometimes, no matter what you do, you’re up to your ears in debt. Why would you go over your finances yourself if you can get help? So, if all else fails, seek help and check if a debt management plan is suitable for you. What is credit card counseling? A certified credit counselor is an expert who will go over your debt and finances free of charge and recommend solutions for paying your debt efficiently. Credit counselors may even suggest a debt management plan. Fortunately, credit cards are eligible for a debt management plan because they fall under the category of unsecured debt, which is any debt not covered by an asset. The benefits of a debt management plan (DMB) are lower interest rates, consolidating credit cards into only one low monthly payment.
For more details, give us a call at (800) 730-900 or fill the counseling form at https://meredian.com/contact-us/ to get your free credit card counseling and to check what best works for you and your financial situation.