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Tips you need for a paid-off credit card debt.
A credit card balance is very much like a financial prison. You keep on paying high-interest rates the moment you get a balance on your card. And the cycle of repaying debts constantly hinders your effort to reach your financial goals.
Now, you must be tired of it all, and you want a complete plan on how to aggressively pay off credit card debt. In this article, you will find a detailed strategy to help you walk out of your debt zone regardless of how much you earn.
Tips On Paying Off Credit Cards Fast
The best way to get rid of the high-interest piling on your credit card is to pay off your debt aggressively. Here are steps you can take to achieve this and some tricks to paying off credit cards.
1| Get An Appointment With A Credit Counsellor
A credit counselor is someone that will help you devise a plan to quickly get out of debt depending on your circumstances. You will get professional advice that will help you on your journey to becoming debt-free. In some cases, the credit counselor will reach out to your creditors on your behalf to create a more lenient payment plan.
You can reach out to a great credit counselor from a reliable credit counseling agency. Their fees are mostly affordable. However, if you cannot afford the fees, there are non-profit credit counseling agencies you can reach out to.
Just make sure you book an appointment and discuss your finances with a professional. It will go a long way as you try to pay off your debt.
2| Create A Debt Repayment Plan
After reaching out to a credit counselor, it is time to quickly create a plan to get rid of your credit card debt. The plan will contain how much you will be allocating to clearing debt monthly, how much you will be saving and what method you will use in clearing your debt.
According to financial advisors and experts, there are two great ways to approach debt: the avalanche and snowball methods.
The principle of the debt avalanche method gives preference to the settling of debt with the highest interest rate. Although, the debts with lower interest rates will be paid as well.
In this plan, you will allocate the largest amount to the debt with the highest interest rate and the smallest amount to the debt with the lowest interest rate.
This way, you get to clear debts with the potential to spiral before debts that rise at lower rates. In the long run, you get to keep the money you would have paid trying to settle accumulated interest.
Here is a free debt avalanche tracker that you can use to start tackling your debt.
The debt snowball method is a wonderful strategy for people already overwhelmed by debt. The amounts you owe may appear too large, and you are just thinking about where you are going to start from.
In the debt snowball method, you pay for debts with the smallest amounts first while paying lesser amounts to larger debts, regardless of the interest rates. You can prepare a budget on how much to be allocated.
This method will give you a motivational push to want to take on bigger debts, especially after you have cleared the smaller ones.
In creating a plan, you may be wondering which to go for. Having a conversation with a credit counselor will help you decide which is best. Also, put your circumstances into consideration and go for the method that seems to be more beneficial to you.
If you want to get serious and start working on your credit card debts using the snowball technique, then this workbook is perfect for you.
3| Pay More Than The Required Minimum Monthly Amount
Paying just the right amount needed on your card will not tear down your debts any quicker. The best thing at the moment is to ensure you always pay above the minimum payments.
For most cards, the required amount is around 1% or 2%, which is quite low. When creating a budget, allocate a higher amount for the monthly fee.
Pick an amount you know you can afford and push yourself to pay that every month. This way, you will be able to get over your debt quickly.
4| Adjust Your Spending
The main trick to paying off credit card debt is becoming disciplined financially. This would hurt, no doubt, but it will help you get over your debt.
Streamline your monthly spending and purchase things you can afford. Weigh your choices carefully. At this point, you will need all the extra money you can get.
Getting rid of extravagant spending habits will be a little hard, but you will get over it with persistence. If buying sprees were what got you into overwhelming debt in the first place, there is no better time to get over this. Start by sacrificing the little things you don’t need, and you will be over frivolous spending in no time.
5| Raise Your Income
Raising your income will help you get over debt quickly as you will have more money to pay off your debt. Increasing your earnings may not be easy as it sounds, but there are two major ways to make this happen. You could either push for a promotion at work or start a side hustle.
Getting a promotion should be way easier if you have been putting your best foot forward at work. However, this all boils down to the kind of company you work with and their ethics.
Either way, there are ways to still scale up. If you cannot get a promotion at the company you currently work with, then you may have to start searching for a better-paying job. Job hunting is not an easy task, but working with a professional career coach should make the hunt shorter and successful.
Besides getting a promotion or a better-paying job, you can start a small side business that you can manage after your work hours. You can start freelancing or offering your services in your locality.
There are a lot of services you can offer in exchange for money. The easiest way to get started is to take some courses to brush up on your knowledge and skills. Then, you look out for people in need of your services.
6| Apply For A Consolidation Loan
The debt consolidation loan is one of the most common personal loans you could easily apply for to get rid of your balance. This method is quick and cost-effective since it comes with a fixed rate and duration period.
You will only have to pay an agreed amount at the stipulated time. Here, you would not have to worry about interests accumulating. Although, you would need a good credit score to be able to get this loan as well as a high income.
Debt Pay Off Tip
Consolidate all your high-interest rate credit cards into one lower interest rate card and start saving money. You can do this with Tally.
All you have to do is download the app and scan all your credit cards. Tally will them offer you a line of credit and start paying your credit card debts for you.
7| Reach Out To Your Loved Ones
Family and friends can come through for you at moments like this. Don’t be shy to ask for help. Reach out to your friends and family that you know are well off and lend a helping hand. Mutually agree on the time the amount borrowed will be refunded and do well to meet the deadline.
This will help you cancel out your debt quickly. Then, you would focus on repaying the amount borrowed.
8| Go For A Lower Interest Credit Card
Under normal circumstances, very few people would opt for a lower-interest credit card, considering the very few benefits it comes with. However, an excellent way to manage your credit card debt is transferring your balance to a lower credit card since the interest rates on such cards are often lower.
Managing the interest that accumulates as debt is more like a shortcut to getting it cleared. Once you have succeeded in paying off all your debt, you can always apply for a credit card with a higher limit.
9| Include Savings In Your Budget
While it is natural to want to get rid of your debt with every cash you can place your hand on, it is a wrong move. Saving may be a little tricky at the moment, but you need to include this in your budget. Ensure you are saving a certain amount monthly, regardless of how little.
Having a debt to pay and running into a financial crisis without any emergency fund to fall back is disastrous. The amount you save must not be a fixed amount. The little put away as savings consistently will be your saving grace on rainy days.
10| Pay Attention To Your Health
Becoming a workaholic will not help you pay off your debt aggressively. All it does is put you at higher risk of developing stress-related diseases. While trying to succeed financially, make sure you are not shoving self-care side.
Working extra hours should not interfere with time for rest and sleep. No matter what, you should still have time to mingle with your friends and your family.
As you work hard to clear your debts and save money for a better future, always remember it is not about intensity but consistency.
11| Take Advantage Of Balance Transfers
Balance transfers, when done right, can help you pay off debt quicker. A lot of times, your existing credit card company will offer lower interest and even 0% interest when you transfer credit card balance from another company. The lower rate will be valid for a certain period and then increases after that.
Now for this strategy to work, you need to commit to paying off the balance before the rate expires. Doing a balance transfer is not free; you usually pay a certain percentage. Therefore, make sure to do the math to find out if the fee is worth it.
Check out how we paid off over $35,000 credit card debt using this method.
Frequently Asked Questions
Q: Will credit card companies forgive debt?
It is more common for a certain percentage of the debt to be waived and not the complete amount.
Q: What is the downside of debt consolidation?
The properties used as collateral are at risk. You could lose them if you are unable to pay up.
Q: What happens after 7 years of not paying debt?
Your creditor can choose to sue you over the unpaid amounts.
Final Thoughts On How To Get Out Of Debt Fast
Credit card debts have a way of consuming most of your earnings. A desire to aggressively pay off credit card debt is very different from acting upon it. You will need to stay committed to your strategy. Clearing your debt in a short while is possible.
Which tip on how to aggressively pay off credit card will you do?
Debt Related Articles:
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- How To Pay Off $15,000 Debt In Less Than A Year
- 5 Best Debt Payoff Tips That You Don’t Want To Miss
- Best Debt Quotes To Inspire Your Journey