Credit cards can be so seductive. The lure of being able to spend money without actually having cash in your hand is something that many consumers just can’t resist. But overusing credit cards can send you swirling into a deep abyss of debt that can seem almost impossible to climb out of once you’re in it.
Credit card debt is very common and doesn’t have to be a financial burden. It’s when these debt amounts start to soar that trouble comes. Debt amounts that are way too high can make it incredibly difficult to pay down. But that doesn’t mean it has to be impossible. Sure, it requires self-discipline and a little bit of sacrifice, but it’s possible to pay off credit card debt and fast.
My credit card spending started to get out of hand, and I soon found myself drowning in credit card debt. For months, I scrambled and scrounged to come up with just enough money to pay the minimum payment amount every month. But that just wasn’t cutting it. With the sky-high rates my cards had, I was barely making a difference in my debt repayment.
But I managed to find a few ways to finally start whittling down my credit card debt. In fact, I was able to pay off credit card debt in less than a year. Yes, it’s possible, and the following steps can help you get to that coveted place of debt freedom sooner than you think.
Put Your Credit Cards Away
One of the first things you should probably do to avoid piling on the debt is to simply stop using your credit cards altogether. Sound obvious? Maybe. But sometimes the simplest suggestions are the most effective.
Getting out of debt means ceasing to add to it. If you’re not spending any more on your credit cards, you won’t be adding any more to the pile. Take them out of your wallet. Ask a loved one to hide them if you’re tempted to reach for them.
Just don’t cancel the accounts altogether. Doing so can actually have a negative effect on your credit score, especially if these accounts are older and have high credit limits. Keep them active by using them once every few months on a small purchase. Make sure the accounts remain open, but just hold off on using them for a while until you’ve got a handle on your debt load.
Pay Down the Credit Card With the Highest Interest Rate
The higher the interest rate, the more money you’ll have to spend to pay down your debt. If you’ve got multiple credit cards, consider focusing your efforts on paying down the one with the higher interest rate first.
Pay as much as you can every month on the credit card that has the highest interest rate and most expensive monthly finance fees. Rather than making minimum payments, at least double or triple that payment amount while still making minimum payments on all your other credit cards. After you’ve managed to pay down the credit card with the highest rate, tackle the next one on the list until your debt is eliminated.
Pay Down the Smallest Debt Amount First
You could also choose to pay off the credit card with the lowest outstanding balance amount. The smaller the amount, the faster it will be to pay it down, which can be very motivating. Once you see one debt load eliminated, you’ll be more encouraged and fired up to deal with the next credit card debt load until they’ve all been paid off.
Make Efforts to Pay More Than the Minimum Amount
Paying the bare minimum every month will take a lot longer to pay down your credit card bills in full. The more you pay towards your outstanding balance, the less money you’ll have to pay in interest overall. That means more of your hard-earned dollar will go towards the actual principal rather than being wasted on interest.
Take Out a Balance Transfer Credit Card
There are plenty of credit card issuers that offer a 0% introductory APR if you transfer your balance from your credit card over to theirs. Of course, that 0% APR won’t last forever, which is why it’s typically dubbed “introductory.” Typically, these 0% APR offers last only for a few months – usually no more than 18 to 21 months at the most.
By using such cards, you can use that time period to enjoy zero interest on your balance, making it a lot easier to pay off your principal much faster. The key is to do your best to pay down all of your debt – or at least most of it – during that introductory period before you start having to pay interest.
As good as these cards can be, they also have some drawbacks if you don’t use them wisely. For instance, many of these 0% APR cards will require that you pay interest on the entire balance that was transferred if you don’t pay it all off before the 0% introductory APR period terminates. You’ll also need to be careful about adding new charges to the card, which would defeat the purpose of transferring your balance in the first place.
Make sure to read the fine print before taking advantage of these cards. Find out what the fees are to transfer your balance as well as how long the introductory 0% APR period lasts.
Consider Debt Consolidation
Sometimes it can be hard to manage multiple credit card debts at the same time. Not only are the amounts tough to pay down, all the different bills can be hard to keep track of. Debt consolidation can help alleviate both of these situations.
By consolidating all of your credit cards and other debt, you can merge them all into one loan amount, usually at a much lower interest rate. By combining all of your debt, it will be a lot easier for you to manage one bill instead of several every month. Not only that but getting a lower interest rate on this consolidated debt means you’d have less interest to pay. That way you’d be able to put more money towards the principal.
However, it’s important that debt consolidation is coupled with a change in spending and debt repayment behavior. If you still continue with your current habits, debt consolidation won’t do much for you. Be sure to use this tactic responsibly to make it work in your favor.
It took me long enough to finally crack down on my out-of-control credit card debt. But once I discovered savvy ways to pay it down and stuck to the plan, I was able to finally rid myself of all that credit card debt in 11 months. Sure, it was tough, but the prospect of living a life of insurmountable debt was not something I was willing to endure forever.
If you’re currently drowning in credit card debt, give any one or all of these tactics a shot. You’ll be surprised at how quickly you can eliminate that nasty credit card debt and achieve financial freedom.