Tips to Lower or Eliminate Credit Card Debt
If you’re carrying a significant amount of credit card debt, you’re not alone. It is estimated that the average U.S. household has nearly $7,000 in credit card balances. Although it takes time and dedication to reduce the balances or eliminate them altogether, there are steps you can take to get control and eventually free yourself from the revolving debt.
Pay More Than the Minimum Due
This point seems obvious but the first thing to do is to put the cards away and stop using them except in urgent situations. Adding to the balance keeps the moving the bar. Next, commit to paying more than the minimum monthly payment due. The credit card companies only require a small portion of the balance each month (anywhere from 1% – 4%). However, if you only pay that amount, it will take several years to eliminate the debt. Pay more than the minimum due even if it means reevaluating your monthly budget to cut corners on other non-essential expenses. Once you get into the habit, you’ll see the balance begin to shrink which will energize you to keep up the good work.
Pay Off Small Balances First
If you have multiple credit cards with balances, consider the “snowball method.” This strategy involves focusing on paying off the smallest balance card first, then moving to the next one and so on. The process will deliver a sense of accomplishment when you knock out the first card while allowing you to pay more to each remaining card as others are paid off.
Transfer Balances to Lower Interest Cards
Look for balance transfer offers with your existing cards or search for others with similar deals. Numerous credit card companies offer balance transfer options which allow you to pay lower or even 0% introductory rates for set period of time. This allows you to pay more toward the principal and reduce balances much quicker than keeping them at higher interest rates.
Get a Debt Consolidation Loan
If you have good credit, another strategy to free you from mounting credit card bills is to secure a debt consolidation loan to pay outstanding balances. You will still pay interest, but these loans typically have lower rates and provide a set date for payoff, ensuring you satisfy the balance when the loan is termed.
You may decide to utilize more than one of the above strategies. Regardless of which you choose, getting started is the key to ridding yourself from the seemingly endless cycle of credit card debt.
If you are interested in a debt consolidation loan or want to discuss other financial needs, stop in to one of our branches or give us a call.
published on 05/16/2022