Credit card debt can linger long after you’ve charged the card. Not only can it feel draining, but it can also take a toll on your overall credit score and finances. While previous purchases follow you into the present, it can feel like there is no easy way to get out of debt, which can be daunting. The good news is, you can!
With a few simple steps, you can overcome the debt you’ve accrued, and get closer to financial freedom. Read below for our favorite – and easy – tips to pay off credit card debt faster.
Use a Budget
Budgeting is an essential part of financial management, and with tools like the 50/30/20 rule and budgeting apps, it can be easy and stress-free.
Budgets allow you to divide your income into categories like essentials, wants and desires, and savings and debt-pay off. By allocating income to each category every month, you establish a better financial snapshot of what you have, and where it should be spent.
Using a budget can help you set appropriate goals to pay down your credit card debt every month, and help you stay on track long-term. It can also shed light on where you may be overspending, and where you can afford to eliminate expenses that can be used for debt payoff instead.
Apps like Intuit’s Mint allow you to establish goals, set up bill payments, and track income and expenses, all at your fingertips. These tools are a great resource for everyday financial management but are especially useful if you’re trying to pay down debt. To learn about other apps that are useful for financial management, visit the Slavic401k blog about financial apps.
If your credit score hasn’t suffered, but your credit card payments feel overwhelming, you should consider debt consolidation. There are a couple of tools you can utilize that will allow you to combine your credit card balances and pay them down together. This strategy also decreases the amount of interest you owe over time because you are only paying one fixed-rate instead of multiple.
One option to consider is a balance transfer card. This strategy allows you to move debt from one account to another, combining totals and reducing high-interest accruals. These cards and accounts often have 0% APR for a limited time and can help you reduce debt over time.
Another option is to take out a personal loan. Financial institutions offer these loans to help people cover expenses such as emergencies, home improvements, vehicle repairs and more. If you have a large amount of credit card debt that you are having difficulty paying off, it may be worthwhile to apply for a personal loan. Because these loans are most commonly offered at a fixed-rate, you can save money on interest over time while also gaining the cash you need to pay off high-interest cards quickly.
Use the Snowball Method
The debt snowball method is a great tool if you have multiple credit cards. Start by listing out all of your credit cards and the total associated with each of them. Once you have an idea of what your debt snapshot looks like, you will start by paying the lowest card off first, then shifting focus to the card with the second highest balance and so on.
While some of your larger debts may have higher interest rates, it’s a good idea to pay off the ones with lower balances first so you can start crossing off debts and refocusing your strategy on the higher payments later.
A trick to the snowball method is that it also builds motivation and momentum by starting with realistic payments first before moving on to the larger ones.
Get a Side Job
If you’re still having trouble finding the funds to pay down debt, consider a side job. If you have a skill, such as writing, landscaping, tutoring, etc. you can sell your services to people in your community.
Additionally, you can apply for a job as a delivery driver or shopper for companies like DoorDash, Uber Eats, or Shipt. These services allow you to choose your own schedule, which is helpful if you’re using it as a side gig.
You can also sell artwork, or other hobby-based projects on Etsy, or sell your secondhand clothes on Poshmark or at Plato’s Closet.
The options to make extra money are endless, but if you find yourself in need of extra funds, a little can go a long way when it relates to credit card debt payoff. Consider your options and find the one that works best with your schedule and needs.
Managing your debt may seem overwhelming, but with the proper resources and tools, you can create a repayment strategy and take steps toward financial freedom. If you’re not sure where to start, first review your credit score so you have a better understanding of how you’re being affected financially.
Remember, debt is a natural part of everyone’s financial snapshot, but credit card debt can get out of control if you let it. Commit to paying down your debt today with these tips and speak with a financial advisor if you have any questions.