Paying off a mountain of credit card debt may seem impossible. But sticking to a strict budget and paying more than the minimum amount will help.
Also, consolidating your debt into a low interest loan would be a good idea.
Want to know more? I’ve run through some ultimate tips below, so keep reading.
Create a Budget
Create a strict budget and cut out unnecessary expenditure. This means no eating out and cable. You can try and earn more money too. This along with cutting down will mean more cash for card payments.
Pay Off the Most Expensive Bills
Make a list of your credit cards from the highest to the lowest interest rates. Prioritizing the ones with the highest interest will make the biggest dent to your total debt.
Make More Than the Minimum Balance
Only paying creditors the minimum balance is not ideal. You won’t dent the amount of debt you have.
Paying more than the minimum balance won’t be hard, if you stick by a strict budget and earn more.
Pay More Than Once a Month
Try and pay a card more than once a month. As you can imagine, this suggestion is not the most popular. But paying more than the minimum balance, at least twice a month will help get rid of your debt the fastest.
Consolidation
Debt consolidation is when you take a loan to pay off an existing debt. Loans are lower interest than credit cards. So, they are easier to finish off.
What type of loan should you get? Payday loans come with the lowest interest rates. But you will need a good credit score. Thankfully, there are alternatives to payday loans that don’t check your credit score. They also let you borrow a larger than usual amount – they are called credit union loans.
Refinancing
Refinancing is when you speak to a creditor and change your terms of agreement. This means your interest rate, as well as your payment plan could be changed.
Debt Relief
Lastly, we have to talk about debt relief. Creditors would create a new payment scheme for you. You’ll be paying them less than how much you owe.
Sometimes, creditors would wipe your debt. But this is rare.
As you can imagine, there are many prerequisites. And there are tax implications as well.
Debt Repayment Account
There are special apps that can help. You’ll connect all the accounts that are linked to your credit report to them. They’ll make sure you won’t ever forget your card bills.
Final Thoughts
What did you think about everything that was discussed? There are many ways to pay off debt. Paying more than your minimum balance, more than once a month will make the biggest dent. However, this is not possible for most people. Try and consolidate the amount you owe.
You can request for debt relief if you are bankrupt. Banks rarely approve it. However, you could have your credit card debt totally wiped.