Paying off credit card debt can be one of the hardest challenges a person may ever face in their life. There are all kinds of reasons why a person’s credit cards might get out of control, but there are solutions that can help. Unfortunately, credit cards can be a slippery slope.
There’s no denying that you may be stressed if you’re trying to work out how to get rid of your debt. In fact, debt can even negatively impact your mental and physical health. This isn’t another thing you want to worry about. Thankfully, anyone can become better at managing their finances and staying out of credit card debt! All it’s going to take is a solid plan of action and a healthy dose of self-discipline.
To help you learn how to pay off your credit cards more effectively, we’ve come up with 8 essential tips for you to follow. For further information on how to pay off credit card debt, talk with an expert at Debt Busters. You don’t have to manage your debt alone.
1) Create a Realistic Budget
First, it’s time to consider looking into your finances in more detail. Don’t worry, a budget certainly isn’t something to be feared and could be very insightful in letting you know where you’re accumulating your credit card debt from.
Learning how to get rid of credit debt starts with a budget that will give you the extra money each month you’ll need to make a meaningful repayment. It helps to make sure your budget is as thorough as possible. Thankfully, we’ve already come up with essential tips to help you budget like a pro. Once your budget is ready to go, continue to the next tips. Your budget is your foundation. Without this, nothing else falls into place.
2) Stay on Top of Repayments
While this can seem fairly obvious, it’s easy to lose track of where you stand with your credit card debt. This is especially true if you’re handling debt on more than one credit card at a time.
Staying on top of your repayments will help you avoid late fees and help you clear your debt even faster. In addition to this, paying off your credit cards on time will serve to boost your credit rating. If your credit rating has already suffered negatively from your debt, repaying on time improves your score.
3) Pay Your Highest Interest Debt First
Next, when it comes to your ‘worst’ credit card debt, this is normally considered to be the credit card with the highest interest rate. Focusing on paying off high interest rate credit cards will mean you pay back less in the long run. Simply take on the worst offenders one at a time.
However, this system can also work in reverse. Some debt experts will tell you to focus on paying off your smallest credit card debts first. This is because it’s normally easier to do so and will free up more of your money quicker. Learn more about debt avalanche vs. debt snowball to determine what’s right for you. There’s no one-size-fits-all when it comes to debt repayment. Find what works best for you personally and go from there.
4) Pay Over the Minimum
Repaying your credit card debt is a commitment that you have to be fully dedicated to. Paying off the minimum payment each month will only prolong this ordeal and cost you far more of your hard-earned money.
In most cases, paying off the minimum credit card repayment essentially goes towards any interest charges. One way you can make sure to repay more than the minimum each month is to dig into your savings. No one wants to, but the quicker you get out of credit card debt, the quicker you can take back control of your finances.
5) Consolidate Your Debt
Another way to pay down your credit card debt fast is to consolidate. When you consolidate your debt, you combine multiple forms of debt into a single payment. You can choose a consolidation credit card, personal loan, informal payment arrangement or any method that fits your credit score.
Not only is it easier to manage a single payment, but you’ll also have the ability to lower your interest rate. This means big savings over time, and less stress for your mental health.
6) Use a Money Management App
If you’re worried about your long term financial goals, try using technology. Money management apps have come a long way. These make it possible to share your goals virtually and hold yourself accountable.
Though there’s no substitute for professional help, money management apps are powerful tools. From budgeting to understanding how much you owe, find the right budgeting app for your needs.
7) Increase Your Income
Of course, another way to pay off your credit cards fast is to make more money to put towards payments. Easier said than done, you don’t have to take on a second job or go overboard to earn extra funds. With the rise of side gigs and hustle culture, it’s possible to find a way to make money that works with your schedule and existing skills.
Whether you sell your expertise online as a consultant, work overtime at work, or help with a family business, every step helps. Put these extra funds toward your debt payoff, making it possible to pay down what you owe quickly. Think of this as a short-term plan designed to help you through your initial payoff goals.
7) Close Your Credit Card
Finally, moving on with your life after clearing your credit card debt couldn’t be more important. No matter how many credit cards you might own, closing down each account after repaying your debt is essential for moving on in your life.
You’ll be able to contact your bank or financial institution to close down your account once all your debt is repaid. There may still be a charge to do this, but you can’t put a price on peace of mind.
Ready to Pay Your Credit Cards?
Ultimately, if you’re wondering how to get rid of credit card debt, think of it as a step-by-step process. The main points you need to take away are that you must be disciplined and committed. You’ll soon have your credit card debt under control if you follow our advice.
If you feel you still need the help of professionals, contact our friendly and experienced team at Debt Busters now on 1300 368 322. We’re here to help you manage your credit card debt with confidence. Though it can feel intimidating, it’s worth taking control of your money.