It happens so quickly and usually pretty innocently. You use your credit card for things you need; like gas and groceries. Before you know it, you realize that you have spent more than you earn and the debt is piling up.
No one wants to be loaded down by the stress of credit card debt. Whether you have a little credit card debt or more than a little, it is in your best interest to pay it off. You may have no idea where to start. It’s OK. You are neither the first person nor the last to feel overwhelmed by bad credit card debt. Here are six ways to help you pay off your credit card debt faster.
- Set Your Financial Goals
The first thing you need to do is to set some financial goals for yourself. What are you saving for? How much do you need a month to pay for your necessities? Don’t just estimate, but calculate a number that you can refer to. Credit card debt can bog you down financially and prevent you from meeting other financial goals.
Sit down and write down clear goals for yourself and be specific as possible. Instead of saying “I want to save some money each month,” say “I will put $50 a month in a savings account for upcoming college tuition.” With your goals in mind, create a budget if you haven’t already. Simply make a list of all your monthly expenses and then subtract it from your monthly income.
- Organize Your Debt Balances
Maybe you have one credit card or maybe you have five. Either way, it is time to organize your specific balances. You could do this with your most recent credit card statements or you could even order a free credit report through AnnualCreditReport.com. This report will contain your balances and your credit card records. After you have a list of your balances, you can start strategizing about how you will pay them off.
- Negotiate With Your Credit Card Companies
Call your credit card companies and see if you can get your fixed rate lowered or even consolidate your credit cards. Many credit card companies are willing to work with you as long as they know you are serious about wanting to pay off your debt. Don’t hesitate to call and ask. If you are able to get your rate lowered, you will be saving money. If you can get your credit cards consolidated, you will also be saving money and you will only need to worry about one monthly payment.
- Focus On The Highest Interest Rate Credit Card First
If you only have one credit card, then this won’t apply to you. But if you have two or more credit cards, you will save money and pay off your credit cards quicker if you pay the higher interest rate card first. The simple reason is that this card is costing you the most money. Pay as much as you can afford to this card and pay the minimum (or a little more) on your other cards. Doing this will not only save you money, but it will also help you pay off your debt faster.
- Pay More Often
You may be thinking, “How can I pay more often when I can barely make one payment a month?” Instead of making a payment every month when it’s due, make a half payment every two weeks. This is actually a great strategy to pay off your credit card quickly and you will believe me when you see the numbers. Let’s say you owe $10,000 at 24.99 percent interest.
A minimum payment may be $400 a month. If you send $200 every two weeks you will save nearly 500 a month in interest. This is huge savings and you won’t be paying more a month, you will be only be paying more often and also saving money.
- Stick By Your Budget
This is not just about paying off your debt, but it’s also about sticking to your budget in order to avoid debt in the future. Think of creative ways to save money. Eating out is one of the biggest ways to save.
Imagine that you eat out five times a week (a combination of breakfast, lunch and dinner). Let’s say you spend an average of 15 dollars on your meal. (Keep in mind; this is just your meal, not your kid’s). That’s 75 dollars a week and 300 dollars a month. Doesn’t that certainly put things into perspective? That is money that you could be using to pay off debt. Sticking to a budget is important to pay off debt and keeping it off!