7 Tips to Pay Off Credit Card Debt Fast
pay off credit card debt fast
Are you drowning in credit card debt? Or maybe you simply spent a little more than you can chew? The average American holds $6,194 in credit card debt and it’s becoming a serious problem.
Credit cards are great when used responsibly and can even help you manage your credit score. However, if you neglect to pay your bills in a timely manner, you can quickly spiral yourself into debt. Learn these seven tips to pay off credit card debt fast.
Pay off highest apr first
Every credit card has an annual percentage rate (APR) which is the amount of interest you’ll be paying on a debt that rolls over from one billing statement to the next.
When looking to pay off credit card debt fast, start with paying off the highest APR credit card first. This way, you’ll be tackling debt that gains interest at a high rate and therefore accruing debt slower than if you paid your lower APR cards first.
If you have credit card debt that is accruing interest, look into a balance transfer. A balance transfer is when you move your debt from one card to another, usually to take advantage of a lower interest rate or a rewards program.
A good card to utilize balance transfers that also gives cashback is the Citi Double Cash. This card gives you a 0% APR for the first 18 months after you transfer a balance from another card.
Many credit card companies waive balance transfer fees, especially during an introductory offer period. Take advantage of this period and transfer your high-interest debt to low or no interest credit cards to pay off credit card debt fast.
Pay At Least the Minimum Balance on Each Card
Get into the habit of paying at least the minimum balance on each credit card if you can’t pay your balance in full.
This will keep your accounts in good standing and help you avoid late fees. Paying the minimum balance will also reduce the impact on your credit score.
Have you ever forgotten to pay your credit card bill? Set up auto-pay so that your bills are always paid on time.
Paying your bills on time will not only help you pay down debt, but it will also regularly withdraw payments from your checking account so that you know how much money you really have.
You shouldn’t set up autopay on your credit cards if you are worried about having enough to pay the amount.
Setting auto pay in this situation will simply spiral you more into debt by giving you hefty overdraft fees. Enroll in overdraft protection on your checking account to protect yourself from this.
Set a budget
Setting a budget is important for anyone, especially when you are managing debt. Having a regular amount set aside to pay off your debt will keep your eyes on the prize of living without debt. It will also allow you to calculate when you will be 100% debt-free.
If you’re not sure where to start, try looking at this 50-30-20 calculator. Once you get used to having a budget, you can allocate more to your savings and debt repayment and less to your wants. This will help you pay off your credit card debt even faster.
Work side hustles
Did you know that one in three Americans currently have a side hustle to supplement their income? Side hustles are a great way to pay off credit card debt fast.
There is a variety of side hustles you can do to earn more money such as tutoring, recording/transcribing, blogging, and more! Many of these you can start right in the comfort of your own home.
Set a goal to have the vast majority of your side hustle money go straight to your credit card debt. This way, you’ll pay off your debt faster than you expected with just your normal income!
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Switch to Cash
Switching to cash will help you reduce your spending by making sure you’re not spending what you don’t already have.
Using cash will also make you conscientious of how much you are spending as it’s much more tangible than a card. If you’re struggling to cut back on spending, consider switching all your purchases to cash only.
Final thoughts on paying off credit card debt faster
Credit card debt can be daunting but using these seven tips can help you pay off your credit card debt fast. Start with these tips today and soon enough, you’ll be debt-free!
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