How to Pay Off Credit Cards Early
- 1). Collect and organize all of your credit card bills. Get the exact dollar amount of your credit card debt. Find out what your interest rates are on each card and the minimum payments required. You will use this information to tackle your debt. Use a debt reduction planner to look at different scenarios to pay off your cards early.
- 2). Choose which cards to pay off first. Find the cards with the highest interest rates and pay those off first. This will save you over the long term in interest fees and enable you to pay off your credit cards earlier.
- 3). Stop using your credit cards. You must stop using your credit cards so that you do not add any more on their balances. It will be impossible to pay off your credit cards early if you keep adding to their balances. Cut up or put a freeze on your credit cards if you have to.
- 4). Pay more than the minimum amounts. Paying the minimum only increases the length of time it takes to pay off your accumulated debt. In order to pay off your credit cards early you will need to pay more than the minimum required. The more money you pay each month will directly reduce the amount of time it takes to pay off your cards.
- 5). Sell any unused assets. If you have a second or third car that you are not using, old computers, electronics or books, sell them to earn extra money to pay down your credit cards. Use online auctions like eBay, the classified sections of your local newspaper, or consider having a yard sale to sell your stuff. Pay your credit cards with the funds you receive.
- 6). Get a second job. If you have the available time and resources, get another job and dedicate the entire paycheck to paying off your credit card debt. It will be difficult at first to use your entire paycheck to pay your debt, so stay focused. Remember, the more you can pay each month on your credit cards, the earlier they will be paid off.
- 7). Borrow money. If you can find a source of capital with a lower interest rate than your credit cards, then you should use this option to pay off your cards early. Some sources of capital that may have favorable interest rates are borrowing from your 401(k), taking out a home equity loan and borrowing against your life insurance.
- 8). Ask your credit card company for a lower interest rate. According to Illinois Attorney General Lisa Madigan, "It's cheaper for a credit card company to keep a customer than find a new one, so if you think that your interest rate is too high, call the number on your card and ask for a lower one." A lower interest rate means a lower balance in the long run, which will contribute to you being able to pay off your credit cards early.
