Unable to settle your credit card debt can make you feel like you are stuck, but it does not necessarily have to be that frustrating regardless of your situation.
To be able to pay off your credit card debt, you should freeze your credit cards, cut your expenses, and design a monthly spending strategy. You could also use your savings and refinance your mortgage in dire situations.
This article will provide you with ten practical strategies to help you pay off your credit card debt.
Set a Realistic Objective
The first step toward paying off your debts is to set a realistic objective that you can attain. For instance, if you have a high-interest credit card or auto loan, you can pick one, set your mind, and then keep the discipline.
When you set the goal, remember to make it explicit, measurable, achievable, and relevant, and give yourself a timeframe for when you aim to attain it.
Freeze Your Credit Cards
One crucial thing that prevents you from maxing out your credit cards is avoiding using them entirely. Put the credit cards on ice to control the urge to use them until you settle every other outstanding debt.
If you need urgent financial help while the cards are frozen, you can use PressPay to access a portion of your salary in advance to avoid additional high-income debts.
Create a Priority List
Create a priority list for all the outstanding credit card amounts you need to settle based on their level of importance.
It would be best if you cleared the high-interest debts first, depending on your financial capacity and how this fits into your repayment goals.
Cut Your Expenses Short
Take time to keep an eye on your spending habits for a couple of weeks to find ways you can trim your expenses.
You can make your favorite cup of coffee at home every morning instead of buying it and direct the expense to your outstanding amount. If you want to settle your debts automatically on your payday, you can sign up for some of our best services at PressPay.
Design a Monthly Spending Strategy
If you want to be able to pay off your credit card debt, come up with a spending plan that will enable you to operate within your financial limits.
For instance, save money with once-a-month grocery shopping, limit your visits to the mall, and split your monthly income between needs, wants, savings, and debt. Maybe give up on wants for a period.
Apply the Avalanche Technique
The Avalanche Technique first focuses on paying the credit cards with the highest interest rate.
Once you settle your fixed once-a-month debts, such as mortgage loans, pay your high-interest loans. When the higher-interest debt is paid off, you should put the extra funds toward the account with the next highest interest rate, and so on until you pay off all your debts.
Implement the Snowball Technique
Contrary to the Avalanche Technique, the snowball technique focuses on paying off the smallest of all your loans first.
Once that is paid off, use the extra money for the next-smallest debt owed, and continue as such until you pay off all your debts.
Utilise Your Savings
When you decide you want to pay off your credit card debts, you can direct your savings toward covering your loans. The money you save from the increasing interest rates will be higher than the interest your savings will accumulate.
Consolidate Your Credit Card Loans
Credit card debt consolidation is a budgeting strategy that involves taking all your credit card balances and combining them into one monthly payment.
This solution works if the new debt has a lower annual percentage rate than your credit cards.
Ensure you understand the terms and conditions of debt consolidation loans before opting for the solution to avoid hidden fees.
Refinance Your Mortgage
If you are a homeowner struggling to pay your credit card debts, you might be able to consolidate everything into your mortgage. Make sure to seek professional advice first to consider all your alternatives.
Questions and Answers
Here are some of the common questions and answers concerning the best ways to pay off credit card debts:
How Can I Pay off My Credit Card Debt Quickly?
The secret lies in creating a solid plan and being disciplined enough to follow it.
- Focus on one debt at a time: If you have several credit cards with outstanding debts, target settling one overall balance, one card after the other.
- Settle a higher amount than the minimum requirement: your overall interest will reduce
- Combine all your debts into a consolidated loan to pay quickly without growing the amounts
- Review your monthly expenses by strategically categorising your spending: use your credit card statement for reference.
What are 3 Ways to Pay Off Credit Card Debt Fast?
- Organise your credit card information: Collect all your credit card information, including interest rates, deadlines, and outstanding balances and start creating a plan
- Categorise the high-interest credit cards: Start settling the credit card balance with the highest interest rate to save in the long run.
- Settle minimum balances on each credit card: Rather than deal with all debts simultaneously, pay the minimum balance for each card to prevent the late fees from accumulating on everything.
Is It Better to Keep a Balance on Your Credit Card or Pay it Off?
You should remember to pay off any balance on your credit card entirely. Leaving a balance will hurt your credit score. Besides, it will be an unnecessary added expense as interest.
What Is the Smart Way to Pay Off Credit Cards in Full?
- Using a balance transfer credit card that provides interest-free services for up to two years
- Consolidating the credit card debt with a personal loan will offer you a smart way to settle the debt entirely.
Is it Best to Pay Off Credit Cards in Full?
Paying off your credit cards in full is the best decision since it helps you increase your credit score and avoid additional interest accumulating on the loan.
How Can I Pay Off Debt Fast with Low Income?
- Avoid making additional debts
- Keep track of your debt records, including minimum balance payments, interest rates, and due dates.
- Review your spending, trim your expenses, and create a budgeting plan.
Is It Better to Pay Off One Credit Card or Reduce the Balance on Two?
According to the snowballing technique, settling the debt with the smallest balance first is better than handling both cards simultaneously.
How Do I Know Which Credit Card to Pay Off First?
Keep track of your credit card balances and create a list based on priorities. You can also start with the high-interest credit card by maximising the monthly amounts you pay.
The above tips will save you from the stress and frustration you might feel if you have several credit cards to pay off. The best way to handle your credit card debt is to create an intelligent strategy and adhere to the plan’s requirements.
If the due date for your minimum payment is before your payday at work, you can use PressPay to access a portion of your salary in advance Contact us today and have any queries you might have answered.
Disclaimer: This article does not represent financial advice. You should speak to a professional before engaging in any credit products.