5 Tips to Help Pay Off Credit Card DebtCredit cards can be both a blessing and a curse. On one hand, they can help you make large purchases and get you through emergencies. Yet, at the same time, interest builds from one month to the next and before you know it, your credit card balance can spiral out of control. This type of scenario plays out for millions of Americans each year. Since over 189 million Americans have credit cards, there’s a good chance you or someone you know has faced this situation.
Have no fear. You can conquer your credit cards. With a little discipline and diligence, take these tips to tackle your debt and pay off your credit card.
How Credit Card Debt Gets Out of Hand
Credit Card Interest RatesMost credit card issuers compound interest on a daily basis. This means that interest is added to your outstanding balance every day. Credit card APRs (Annual Percentage Rates) can range anywhere from 15% to 25% or more, depending on your credit. Because of this, your outstanding card balance grows each day, even if you haven’t swiped your card in a while.
More Than Monthly PaymentsMost credit card issuers require a minimum monthly payment. These minimum payments can be fairly small, let’s say $35, for example. However, as mentioned before, your interest grows daily. So, by paying only the minimum on your monthly credit card bill, it could take months, or even years to pay off balances that are just a few hundred dollars.
Credit Card Late FeesSometimes, life happens, and you can’t make your minimum monthly credit card payment. Then, you’re hit with a late fee. A typical late fee could be $35, for example. This only adds to your burden and makes it harder to pay off credit card debt.
5 Steps to Help Pay Off Credit Card Debt
1. Stop Using Your CardThis is the first action to help pay off credit card debt. Stop using your credit card to prevent further debt. Some people hide their credit cards from themselves, hand them over to a trusted loved one, or even freeze their cards in a block of ice. Yes, that’s right. Extraordinary times call for extraordinary measures.
2. Create a Monthly BudgetNext, come up with a plan to pay off your credit card debt. This requires saving extra money aside strictly for your credit card bills. This step is difficult since it’s tempting to dip into this fund. However, you must hold strong.
3. Pay More Than the MinimumMake sure your monthly payback plan applies more than the minimum payment toward your credit card bill. Larger payments help to minimize potential interest owed, while also knocking down your balance quicker.
4. Pay Off Your Smallest Balance FirstIf you’re trying to pay off multiple credit cards, the conventional advice is to pay off the smallest balance first. Then, take that payment and apply it toward your larger balance. This is commonly known as the Snowball Method.
5. Seek Financial SupportThroughout your journey, it’s important to seek support from others to help pay off credit cards. This can be through credit counseling, self-help books, podcasts, support groups, online financial resources, and more.
Consolidate Your Credit Card DebtAnother option to help pay off credit cards is to consolidate multiple bills into one single loan. Depending on your state, Check Into Cash may offer a loan large enough to help consolidate credit card debt.
Consider an Installment LoanNeed a little more cash? An Installment Loan offers higher dollar amounts of up to $5,000, depending on your area. You can pay it back over a longer period of time with bi-weekly or monthly payments over terms ranging a few weeks to a few months. Also, there is no penalty for early payment. Installment Loans can potentially help you consolidate multiple credit card balances into one single loan.
Perhaps a Payday LoanNeed a small, quick loan? A Payday Loan is a small-dollar, short-term personal loan used to help a person with unexpected expenses. Payday Loans generally range from $50–$500, depending on your state. Payday Loans are a safe and convenient way to cover small, unplanned expenses, like paying a monthly bill, for example. Built to help with life’s small emergencies, Payday Loans offer quick cash when payday is a little too far away.
Try a Title LoanWith a Title Loan, you can borrow using your vehicle title as collateral. If this loan type is offered in your area, all you need to do is bring the clear title of your vehicle and a few other documents, like proof of income and photo ID, depending on your state. Then, if approved, you can drive away with cash the same day.
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