Credit card debt can quickly add up before you even realize it, and once you get stuck with paying high minimums each month, you might think you’ll never have a chance to escape. If you’ve been asking yourself how to get out of debt or how to pay off credit card debt, you’ve come to the right place.
Here are a few tips on credit consolidation and how to pay off debt quickly.
Pay More Than the Minimum
As hard as it sounds, if you’re at all able to pay more than the minimum on your credit card debt each month, you should absolutely do this. By only paying the minimum, it can take twice as long to finally pay off your debt, and you’ll end up spending more overall on the interest owed. Every extra dollar can go a long way in helping to lessen your debt over time.
Pay Off One Debt at a Time
If you carry a balance on more than one card, try to target one of those debts to pay off fully, and then focus your attention on the next. You won’t believe how good it feels to finally pay off one of your cards, and to get the opportunity to move on to the next one.
There are two routes you can explore – try paying off the cards with the smallest balances first, or target the ones with the higher interest rates.
Just keep in mind that as you pay your debt down that you also continue to control your spending. Paying off one of your debts doesn’t mean that you suddenly have more money available – continue trying to pay down your debt with that money instead so you don’t fall back into bad financial habits.
Consolidate Your Debt
If you have several credit cards with high interest rates, consider combining the balances into one, at a lower interest rate. This can help you pay off your debt faster, without increasing your payment amounts.
There are two ways you can do this. If you have home equity available, you might be able to use this to help pay down your credit card debt. Explore home equity loans that might offer a lower interest rate than what your credit card debt offers.
You can also explore low balance transfer offers to move your debt away from higher balance cards – but you need to be careful to take note of balance transfer fees. They are often 3-5 percent of your balance, but it might be worth it if they offer a lower interest rate. Be sure to do the math to ensure that you’re getting the best deal.
Balance Your Budget
One of the simplest things you can do is be honest with yourself about your spending, and to reprioritize what you’re spending each month. Pay attention to what you spend on necessities, and make sure that you’re only spending money on things you absolutely need.
Look for areas in your spending habits where you can cut back each month, and apply the difference to the debts that you’ve accumulated. Sometimes breaking your spending habits can go a long way in helping to quickly reduce overall debt.