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5 Steps To Pay Off Credit Card Debt Quickly

Nov 16, 2022 | Money

To be clear, although a credit card is a useful financial tool available to help you manage your personal finances, credit card debt can end up harming your financial health. We say this because there’s been a persistent stigma that the use of credit cards is a sign that you can’t manage your money properly.

For instance, a credit card can help you build a good credit history and demonstrate responsible payment behaviour, without which you can’t make big purchases, like applying for a home loan to buy your dream home.

That said, there is such a thing as too much credit card debt. For all the good they can do, credit cards can be one of the more expensive types of debt to maintain – with some of the highest interest rates.

It’s understandable if you’re feeling weighed down by your credit card debt.

Here are 5 tips to pay off your credit card debt faster.

These tips you can use to extricate yourself from debt faster and achieve the financial freedom that you’re craving.

  1. Don’t stick to the minimum repayment:

Here’s something that most people don’t think about it… as your credit card debt decreases, so does the minimum amount, prolonging the torment. There’s also the temptation to give into unplanned spending, because your repayments are easy breezey. That’s why you need to set your most recent repayment as the number you’ll pay every month until you’re done. Genuinely, you’ll be shocked at how quickly your debt disappears.

  1. Make repayments a priority

Nothing worth having comes easy, so while it may be intimidating to tackle your debt (particularly if you have more than one card), set your intentions. Focus on the freedom that you’ll gain and prioritise making your payments on time.

  1. Avoid using your savings

It’s tempting to use your savings to get your debt squared away in a single payment. Not just that, but there’s also a lot of sense in this, because your credit card debt costs more than your savings account earns. The thing is, your savings (especially your emergency funds) are there for a good reason, like helping you cope if you’ve been retrenched as a result of a pandemic.

It’s far better to look at the various repayment strategies available before you turn to your savings.

  1. Debt busting strategies

There are multiple strategies that you can use to clear your credit cards, but we have to admit that we have our own top picks.

Our top repayment strategies include:

  • Avalanche Method – Make the monthly minimum payment on all of your accounts and then put as much as you can afford into the account with the highest interest rate. Once this account is paid off, move to the account with next highest interest rate.
  • Snowball Method – Make the minimum monthly payment towards all your accounts and then pay as much as possible into the account with the smallest balance. Once this debt is closed, go after the next account with the smallest balance.
  • Lasso Strategy – Consolidate what you owe on all your credit cards (and accounts) into a single debt and make one repayment every month until it’s all paid back.
  • Personal Loans – Pay off all your debts at once and take advantage of a lower interest rate offered by personal loan providers, but before you do, use a personal loan calculator and see what your repayments could be.
  1. Hide your cards

This sounds a little simple, too simple to be on our hit list. But honestly, not taking your card out with you is sometimes your best solution to unnecessary spending. Draw the money you need for each area of life on a weekly basis, like your groceries and whatnot, so that you can safely leave the cards at home while still being able to pay your way.

Feeling informed?

We hope that this information will help you find financial freedom. We all deserve to experience strong financial health. If you’re worried about your overall credit rating, find out how you can improve your overall credit rating.

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