Credit card debt is not a joke. Millions of families struggle each month to make ends meet as a direct result of too much debt; paying their bills and other necessary expenses take so much of their money they cannot afford to pay for anything else throughout the month. This is not an uncommon problem, and many people wonder how they can get out of debt fast. Unfortunately, it isn’t always realistic to get rid of debt fast, but it is realistic to get rid of it faster than you currently are getting rid of it. By following a few simple rules, everyone can pay off their credit card debt as fast as possible, which means saving more money and having more financial freedom.
Stop Spending
The first rule of paying off credit card debt fast is to stop using your credit cards. Take note, we do not mean indefinitely. According to Mint, credit card inactivity can impact your credit score. You will use it again eventually but only after you have paid off your current balance.
Obviously, you cannot pay them off if you are still using them, which means taking them out of your wallet and putting them somewhere inaccessible if you haven’t the willpower to stop using them on your own.
Try freezing them in a block of ice in your freezer or putting them in your safety deposit box. Using them will mean a lot of additional work and oftentimes will make you realize that the purchase you want to make but don’t need to make is simply not worth the effort it will take to retrieve your cards, making it easier for you to stop using them.
Transfer Balances
Check your credit card statements to find out how much your interest rate is. If you have a card with a low-interest rate and other cards with higher rates, transfer the balances from your higher rate cards to your lower rate cards to save money on interest charges. This will help you to pay off your balances much faster than you currently are. If all your cards carry a high-interest rate, see if you can obtain a card with a lower interest rate to transfer your balance to and then cut up your high rate cards.
Make Bigger Payments
Making the minimum payment on your credit cards each month is going to cost you years of additional interest fees and years of additional payments. The minimum balance is designed to pay the interest charges you incur each month and very little else. This means that you are essentially only paying off the interest that accrued that month and a few dollars of your balance, which will take years to pay off. By paying more than the minimum balance, you are ensuring your card is paid for faster and that you are incurring fewer interest charges each month.
Negotiate With Your Creditors To Get Out Of Credit Card Debt
Call your credit card companies and simply ask for a lower interest rate. This does not always work, but when it does, it means that your rates are lowered. In effect, you will save money. The best way to go about doing this is to tell the card company that you want to keep your business with them. However, you simply cannot unless they can lower the interest rate on your card. If they cannot do this, you are looking to transfer your balance to a new card soon. Most companies are happy to work with you to lower your interest rate.
However, when they do not respond to your requests, they will respond to your negotiations when you are facing bankruptcy and they are facing the prospect of writing off your account as a total loss.
Make Wise Payments
Figure out which of your credit cards has the highest interest rate. You can focus on paying that balance of the fastest. This means applying all the extra funds you have to this payment each month. This is an effort to pay it off fast and to lower the amount of interest being accrued. Once that card is paid off, use the money you were sending to make the payments on it. Add it to the payment you are already making on the card you have with the next highest interest rate. Do this until all of your cards are paid off. This can help you pay off your debt years faster. Not only that, it can help you to save hundreds, if not thousands, on interest rates each month.
Pay All Your Bills On Time
Always make sure you pay your credit card payments on or before the date they are due each month. Paying late results in late fees that increase your balance. Some credit card companies even hike up your interest rate as soon as a payment is even one day late. Paying on time will save you a lot of money.
The length of time it takes to pay off your debt depends on how much debt you have. The less debt you have, the faster you can pay it off. Persistence and determination are the keys to paying off your credit card debts as fast and easy as possible. Talking with a debt counselor now can explain more debt relief options.
