Here in the U.S., credit card debt is at an all-time high. According to one study, our debts total $930 billion, with the highest delinquency rates going to younger Americans.
In other words, if you’re struggling to pay off credit card debt, you’re far from alone!
When it comes to debt management, there’s more to consider than throwing money at every possible balance. Instead, a few smart moves can help you get out of credit card debt faster. Here’s what you should know.
Choose a Debt Management Strategy
When it’s time to pay off your credit cards, one of the most important things you can do is choose a debt management strategy. These tactics help you pay down your debt faster than you might with more randomized payments.
With this method, your focus is on paying off your smallest debt first. You’ll still make minimum payments on your other cards. When you’ve eliminated this small debt, you’ll continue to the next smallest debt, and so on.
You’ll start by paying off the debt with the highest interest rates to save more money on interest. Like the method above, you’ll still make minimum payments on other debts, and you’ll continue to the debts with the next highest interest rates when you’re done.
You can consolidate debt in many ways, but most people choose to do so with a personal loan or by transferring balances from low-quality cards to a card with a lower interest rate.
This strategy allows you to combine all of your account balances into a single monthly payment. Often, another benefit is a lower interest rate.
Tips to Pay Off Credit Card Debt
Once you know your main strategy, it’s important to consider how to pay off a credit card using habits in your daily life. Here are a few ways to streamline your debt payoff.
Make Larger Payments
This, of course, is the best way to eliminate debt. If possible, find ways to make extra income via a side hustle to put more money toward your monthly payments. You should also put any financial windfalls, such as annual bonuses or tax refunds, toward your debts.
Reduce Your Expenses
It’s easier to control your debt when you’re spending less. Aim for a low balance on as many cards as possible until you’ve paid off your current debt. Many people find it helpful to review their spending and make a budget they can stick to.
Consider Debt Counseling
If you believe you have a spending problem, financial counseling from an organization may help. This extra guidance can help you understand everything from debt management strategies to revolving utilization. With more of the tools and resources you need, you may find it easier to keep your spending in check.
Get Out of Credit Card Debt
Credit card debt is incredibly common, but that doesn’t make it easy to escape. Whether you’re struggling to pay off purchases that total a few hundred dollars or you’re drowning in thousands of dollars of credit card debt, having the right debt management strategies can be crucial.
If you’re struggling to pay off credit card debt, take a look at our other posts for additional insights. We also offer a look at debt relief solutions that fit your needs, so be sure to see if you qualify!