Credit cards often come with a lot of perks when used right: earn rewards and cashback on some items, offering added legal protection and so much more. But sadly, the unavoidable truth about credit cards is that they have interest rates that can add up if you don’t pay your credit balance by the end of the month and so much more. This is a serious problem to consider when you factor in the statistics about the average American carrying around $7200 worth in credit card debt.
But it doesn’t have to be this way, as you can get yourself out of this debt as long as you follow whatever is written in this article. The steps that we’ve provided for you below will show you exactly how to pay off the credit card:
1. Set Up a Goal
The first and most important thing that you must consider how to pay off credit card debt is by setting up realistic goals. You should also think about how you’re going to pay your high-interest credit cards as well as other types of consumer debts (line of credit, overdraft, vehicle loans). Although you can run up balances relatively quickly, it does take a bit of self-discipline and some time before you can pay them off entirely. To keep track of your goals and stay motivated as well, you need to monitor your progress as you go on regularly.
2. Always Pay Your Bill In Full Every Month
If you don’t want that credit score to haunt you for the rest of the year and so on, you need to pay the bill in full before the end of the month. For this, we advise you to charge what you can afford so you can pay for it later on. You can even pay it a couple of more times to stay ahead of your debt.
It might seem a bit challenging at first, but this is how you can take advantage of your credit card instead of letting it do it to you. This is one of the surest ways of getting out of debt as well as avoid paying for any interest on your purchases.
3. Negotiate Lower Rates
Reducing your interest rates is another way to pay off credit card debt. To do this, you’ll need to change the interest rate on your mortgage through refinancing. It may take some work, but it’s worth looking into if the interest rate that you’re going to get is a percentage lower than the one you already have.
However, you can also get a lower interest rate on your credit card debt if you ask for one. According to a March 2017 study from CreditCards.com, 69% of cardholders who asked for a lower interest rate ended up getting one. Even 87% of those who asked for a late-fee waiver succeeded in their efforts. The average reduction was six percentage points.
4. Consolidate Your Debts
Another way to pay off credit cards faster is by consolidating your credit card debt with a credit card consolidation loan, otherwise known as a personal loan. This allows you to consolidate your remaining debt balance into an unsecured personal loan that can be repaid in 3 to 7 years’ time.
If you’re planning on repaying your credit card debt within this timeframe, and evidently acquire a lower interest rate than the current interest rate on your credit card, consolidating debt is indeed an excellent strategy to save on interest costs.
For instance, let’s say you have $10,000 worth of credit card debt at a 15% interest rate. If you can somehow have that credit card debt consolidated with a personal loan at an interest rate up to 7% and a 3-year repayment term, you’ll be saving about $2,634 and pay the credit card debt sooner.
To learn more about debt consolidating in Canada, visit this website.
5. Double Your Minimum Payment
Making the minimum payment on your credit card is not going to wreak havoc on your total debt load. If your aim is to pay off as many debts as possible, then just focus on any extra funds that you may have left after covering your non-negotiable expenses (like food and housing) to this payment. First, start out small, and then work towards doubling the minimum payment afterward.
6. Get a 0% APR Balance Card
Yet another excellent option on how to pay off credit cards fast is by getting a 0% APR credit card. This card is special, as it can give you a 0% interest on your credit card balance for a set period of time. What this means is that you can transfer your ongoing credit card debt balance on a new credit card.
This is a great thing to consider as most APR cards provide no interest on credit card debt for 6 to 24 months. Towards the end of the grace period, you’ll only owe interest for any interest rate that’s based on the credit card profile and other factors as well.
In other words, 0% APR cards provide you relief on credit card interest, allowing you to pay off whatever the depth balance is during the grace period.