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- Tips for Paying Off Credit Card Debt
- Tips #1: Get Organized
- Tip #2: Pay off the balance with the highest APR first
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- Tips #3: Pay off the card with the lowest balance first
- Tips #4: Consolidate your debt to a single card.
- Tips #5: Stop charging
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- Learn more tips for paying off your credit card debt
New The Most Important Thing
Tips for Paying Off Credit Card Debt
5 Important Tips
High balances and high finance charges can put a real drain on your wallet and limit your financial options. And if you let those balances linger long enough, they could keep you from achieving other important goals and dreams, such as buying a home.
Whatever your financial goals and dreams, paying off high-interest credit card debt is the first important step in the right direction. These pay-down tips and strategies will show you how.
Tips #1: Get Organized
Do you have lots of balances spread out over lots of different cards? Do you have one big balance and several small ones? Have you consolidated your debt to one card but can't seem to make any headway on your balance? Have you been playing the balance transfer game for months and months?
Next, add up the minimum payments on each of your credit cards. How much money must you pay each month just to stay current on your credit card bills? Can you afford to pay more than the minimum payment on one or more of your cards? If so, get ready to do it.
Debt can pile up for all kinds of reasons. Paying it down is pretty straightforward. Pick a pay down strategy and stick with it until your balances are paid off in full.
Let's take a look at three different pay-down strategies.
Tip #2: Pay off the balance with the highest APR first
Doubling or tripling your minimum payment on the card with the highest interest rate is a good way to start. Whatever payment boost you can afford, do it and stick with it. If you start by paying $150 on a credit card, keep on paying at least $150 each and every month until the card is paid off.
Be sure to stick with your boosted payment amount even as your balance and minimum payments slip lower and lower. Remember: the aim is to get your balance to zero. Easing up on your payments as your balance creeps lower will slow your progress.
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Tips #3: Pay off the card with the lowest balance first
This strategy is a great way to build up a little momentum. With this strategy, you increase your payment on the credit card with the lowest balance, while continuing to make the minimum payment on the rest of your credit cards. Once you pay off the card with the lowest balance, you move on to the card with the next lowest balance, and so on.
It's quicker and easier to pay a $500 balance down to zero than a $2,500 balance. And it feels good to pay a credit card bill in full, no matter what size balance you begin with. Plus, every low balance card that you pay in full is one less minimum payment that you have to pay each month. By knocking out one or two smaller balance cards, you'll have more money to focus on larger balances.
Tips #4: Consolidate your debt to a single card.
This payment strategy makes things easy, but it also makes it easy to let things slide. So pick a payment amount, double or triple your minimum payment (or whatever you can afford), and be sure to stick with it.
Tips #5: Stop charging
Whatever pay-down strategy you choose, it's essential that you curb your credit card spending. It's awfully hard to pay down credit card debt when you keep ringing up new balances each month. Put your credit cards on ice while you focus on paying down card debt. Pay with cash, check, or debit card instead. If you must use your credit card, only charge items you can pay off in a month or two.
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Learn more tips for paying off your credit card debt
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