Debt is a crushing burden for anyone and with inflation rates soaring high those monthly payments just keep creeping up on you. Carrying debt can put you behind on many of the things you are looking forward to in life such as retirement or saving enough for a home.
With nearly 50% of the USA population carrying some form of credit card debt know you're not alone and that there are sure fire ways that can help you pay off that debt faster. Sure credit cards can be a useful tool and even get you more out of life. But with improper use of them you can quickly find all those benefits washed away with that aggressive 20% or higher interest rate, late fees and other fees they give you.
Bonus Tip: Money not spent is money earned
The first thing we would recommend doing is looking at your last few credit card statements and seeing what is currently being charged on to the card via monthly subscriptions that you most likely don't need or could do without. A simple $14 a month payment can add up to a lot when it carries a 20% or higher interest rate on it so ever bit counts here.
That $14 a month payment adds up over time as the interest continues to build on it. A penny saved is a penny earned and those savings can help build your emergency fund which you can find out more about building your own and how with our article on How To Build an Emergency Fund.
3 Sure Fire Ways Of Paying Of Debt Faster
1. Avalanche Method
Known as the avalanche method instead of looking at your debt in its entirety you look at it as bit by bit. To do this method you take a look at all of your outstanding debts on every account you have and then look to see which one has the highest interest rate or interest rates and fees that you are being charged for. Once found you goal is to hammer that single bill as hard as you can until it's fully paid off before moving on to the next card. You do still however need to keep paying the minimum balances on all the other credit cards.
This method can help pay off your highest interest rate first which can often save you a little money over time as you pay off your entire debt. That's because your highest rates are being paid off first. This method is best for people who can stick with long-term goals even without immediate results.
2. Snowball Method
Known as the snowball method you'll be putting priority on the debt with the lowest amount on it. For example if you have three credit cards with debt on them of card 1: $500 card 2: $1,000 and card 3: $3,000 you'll focus on paying off the $500 card first no matter if it has the highest interest rate or not.
This method is best for people who need immediate results to stay motivated. Being able to pay off that first credit card fully is fast with this method and can feel good that you just knocked out one account and are moving on to the next quickly.
The negative of this method is that if your lowest balance card is not the one with the highest interest you could very well end up spending more money to pay off your debt.
3. Balance Transfer
If you've been paying off your bills on time and you have a rather good credit rating you could try what is known as a balance transfer. This method is extremely effective on saving you money and giving you a little breathing room.
With a good enough credit rating you can apply for other credit cards. I know it sounds crazy but hear us out! What you're looking for is a 0% balance transfer card that has no fees and no interest on that balance transfer for at least 12 months or better.
What you do is transfer your credit card debt on those cards to this new card which will essentially stop the interest charges you're currently being hit with. This is often 20% or higher so if you're able to move $3,000 of debt off of a 20% APR credit card you're currently on you could end up saving yourself around $400-$600 in interest payments by making this move and paying off your debt that much faster.
There you have it! Three sure fire ways you can start paying off your debt and start moving towards your goal of being debt free.