It’s time to pay off credit card debt. In this article, I’ll provide six simple steps to help you to get your balance from insurmountable to zero.
Our relationship with credit cards starts with the best intention. We never plan to carry a balance from month to month. With the best intentions, things still happen and a relatively small balance can turn into a huge pile of debt.
So what can you do? Accept the financial reality and your role in it. This is a debt mindset shift that will keep you moving forward. Often, I’ve discovered people who skip this acknowledgment may find their balance go down and then rocket back up. Why? It’s simply an unconscious reliance on credit cards and a habitual practice of mindless swiping. It happens, but you don’t have to be trapped in the credit card debt cycle.
Let’s get started.
6 Simple Steps to Pay off Credit Card Debt
Stop using the credit card
If you plan to pay off the credit card, the best way to tackle the debt is to stop adding to it. This is the main factor as to why many have a challenging time paying off credit card debt. If you’re worried about a creditor closing off your card, don’t worry. Since you’re carrying a balance and making payments, the chances are slim they’ll take that action. Focus on eliminating the debt not holding onto credit.
Pay more than the minimum monthly payment
Take a look at your credit card statement. There is a payment details box that shows what will happen to your balance and the interest paid if you only pay the minimum amount. Take an even closer look at how much you’ll save and how fast you can pay off credit card debt by adding to the minimum payment.
Under the payment options box, you’ll find how much you need to pay to get rid of the credit card debt in 3 years.
Use the debt snowball or debt avalanche method
You have two popular options for paying off your debt: debt snowball and debt avalanche. Depending on what motivates you the most, you can choose one method over the other. The debt snowball is the process of paying off the smallest balance first and applying the payments to the next smallest balance. Debt-avalanche is focused on paying off debt with the highest interest rates first. Choose the method that keeps you motivated. Learn more about which credit card debt payoff method works best for you.
Make additional payments
Adding a few extra dollars to your monthly payment, as noted in step 2, can pay off debt sooner. But you don’t have to wait for the due date. Choose to make additional payments towards your balance whenever you get extra cash. Do it immediately too. How can you find the extra money?
- Find ways to lower your household expenses
- Sell your stuff in online marketplaces
- And start a creative side hustle to supplement your income
Make use of balance transfers
When there are too many cards to manage, it can be an overwhelming process. You may benefit from a zero-interest balance transfer offer and combining multiple credit cards into one. This may be a good option for you especially if you can get approved for a new card or have a card with available credit and special offers. Contact the credit card companies where you have available credit and inquire about balance transfer offers.
Additionally, there are services that have been created to help those with multiple credit cards. Tally is a debt management app that provides a credit line. Learn more about Tally here or get started.
Consider a debt consolidation loan
From experience, making one payment as opposed to multiple payments is an easier way to pay off credit card debt. It removes the likelihood of a missed payment and often the debt is consolidated into a lower fixed rate payable within 3-5 years. Consider the alternative as mentioned in step 2. Credit unions and banks offer debt consolidation loans but there can be loan limits. The limits may not be enough to manage your existing credit card balances so you’ll need alternatives.
Some options include Tally, as mentioned before, and Payoff a financial services company that is focused on credit card debt payoff. The Payoff Loan™ gives you the power to reduce multiple high-interest payments into one low-rate monthly payment. Learn more about Payoff.
In conclusion, I want you to know you have options. It can seem overwhelming but credit card debt freedom is in your future. Consider these steps and ideas to help you achieve your financial goals. I also suggest you continue to monitor your credit using Credit Karma or Credit Sesame. These two companies also offer a service that can help you with additional financing options.