Best Ways to Pay Credit Card Debt Off Fast
Credit card debt can make you feel like your are drowning.
Panic sets in, you stop thinking rationally, and make bad choices.
That is when you need someone from the shoreline to shout out to you and tell you there is a sandbank a few meters to the left, or to throw you a lifesaver and reel you in.
Financially speaking there are many steps you can take to get yourself out credit card debt fast.
1) Contact your creditors.
If you are struggling to pay your credit cards the first step the Federal Trade Commission recommends is to talk with your creditors.
Explain to them your situation, how long you feel it will last, and what they can do to help you pay your debts.
Some creditors might consider granting you a grace period where you do not have to make monthly payments, or provide you with some other financial break.
2) Pay the highest interest cards first.
If you have various credit card loans you need to focus on paying for your most expensive loan.
That would be the loan with the highest interest rate.
Then use the money you budgeted for the first loan and start paying the next most expensive loan.
The potential savings of doing this are substantial.
For example, imagine you have two credit cards (let's keep it simple).
One has a balance of $4,000, the other $2,000.
Their interest rates are 18.
9% and 17.
5% respectively.
If you follow the advice we mentioned above you could save up to $2,000 in interest rates.
Bankrate.
com has a great calculator that explains this process in more detail you can link to from the reference links below.
3) Use your savings to pay your credit cards.
If you have a nest egg sitting in an investment portfolio, or some cash getting a pathetic interest rate in a savings account, do yourself a favor and use it to pay your credit card debts.
Why? Well the math is very simple.
The best savings accounts give you around 2%, but credit cards charge you anything from 15% to 25% interest.
If you use your savings to pay your credit card you are in effect receiving a huge return on your investment.
This does not mean you should tap into your retirement funds, but for most other saving funds this is one of the smartest debt reduction moves you can make.
4) Take out a debt consolidation loan.
This will pay your credit card debt immediately.
Of course you will still have to pay your debt consolidation loan, but the interest rates will be lower, and you will only have to manage one monthly payment.
5) Get help from a reputable credit counseling service.
Debt counseling professionals can take a look at your financial position and provide you with excellent advice on how to pay off your debt faster.
They can also help you negotiate a new repayment plan, and advice you on how to improve your credit rating.
Panic sets in, you stop thinking rationally, and make bad choices.
That is when you need someone from the shoreline to shout out to you and tell you there is a sandbank a few meters to the left, or to throw you a lifesaver and reel you in.
Financially speaking there are many steps you can take to get yourself out credit card debt fast.
1) Contact your creditors.
If you are struggling to pay your credit cards the first step the Federal Trade Commission recommends is to talk with your creditors.
Explain to them your situation, how long you feel it will last, and what they can do to help you pay your debts.
Some creditors might consider granting you a grace period where you do not have to make monthly payments, or provide you with some other financial break.
2) Pay the highest interest cards first.
If you have various credit card loans you need to focus on paying for your most expensive loan.
That would be the loan with the highest interest rate.
Then use the money you budgeted for the first loan and start paying the next most expensive loan.
The potential savings of doing this are substantial.
For example, imagine you have two credit cards (let's keep it simple).
One has a balance of $4,000, the other $2,000.
Their interest rates are 18.
9% and 17.
5% respectively.
If you follow the advice we mentioned above you could save up to $2,000 in interest rates.
Bankrate.
com has a great calculator that explains this process in more detail you can link to from the reference links below.
3) Use your savings to pay your credit cards.
If you have a nest egg sitting in an investment portfolio, or some cash getting a pathetic interest rate in a savings account, do yourself a favor and use it to pay your credit card debts.
Why? Well the math is very simple.
The best savings accounts give you around 2%, but credit cards charge you anything from 15% to 25% interest.
If you use your savings to pay your credit card you are in effect receiving a huge return on your investment.
This does not mean you should tap into your retirement funds, but for most other saving funds this is one of the smartest debt reduction moves you can make.
4) Take out a debt consolidation loan.
This will pay your credit card debt immediately.
Of course you will still have to pay your debt consolidation loan, but the interest rates will be lower, and you will only have to manage one monthly payment.
5) Get help from a reputable credit counseling service.
Debt counseling professionals can take a look at your financial position and provide you with excellent advice on how to pay off your debt faster.
They can also help you negotiate a new repayment plan, and advice you on how to improve your credit rating.
