6 Strategies to Pay Credit Card Debt Fast
No magic will make your debts disappear unless you take control of your financial life. Don’t postpone your revival. Face it now, using the 6 strategies that work.
Incurring debt is easier than paying back what you owe, obviously. In fact, most of us go through a significant portion of their lives trying to pay off past debts without knowing how to pay up collectors the smart way.
According to Moliere, “Debts are nowadays like children begot with pleasure, but brought forth in pain.”
knowing how to pay off your debt fast is one thing, not incurring more debt is another. Though this article is focused on “The best way to pay off credit card debt: 6 strategies that work!”
subscribe to our blog for more tips on how to stop incurring debts while maintaining a healthy financial record. Here are some of the best options available that are considered the best way to pay off credit card debt.
If your debt cannot be paid in full, you already exhausted your emergency fund, are unable to save money, if you cannot afford to pay your car loan, student loans, collection accounts, monthly payment or any other payment plan is not that hard, all you need is a bank account to follow the steps below.
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Best Way to Pay Off Credit Card Debt
Without proper planning, you’d face many challenges on your way to being completely debt-free.
The lesser your debt, the simpler your plan. People with one debt can easily pay their debt amount by making the largest debt payment affordable each month. With time and persistence, the debt amount will gradually be paid off. This is the best way to pay off credit card debt.
But for many people who have multiple debts to deal with, more sophisticated strategies are required.
6 Strategies That Work to Pay Off Credit Card Debt
Snowball Method to Pay Off Credit Card Debt
The snowball method requires you to pay your debts from the smallest to the largest amounts.
At the onset, the ease will not only motivate you but also prepare you for the debts ahead. All you have to do is keep paying consistently and stick to the plan.
- Start with the smallest payment on every account.
- Add extra cash to the account with the smallest balance.
- Immediately, once you’re able to get rid of the debt, direct the funds you’ve been adding to the next account (smallest). Repeat the procedure until you’re done paying your debts.
Want to see how the snowball method works? Click here
The main idea guiding the snowball method is the “cut the branches before the root” kind of idea. It gives you time to experiment with different principles before dealing with your biggest debts.
Not sure if this method suits you? Here are the pros and cons of the snowball method.
Avalanche Method to Pay Off Credit Card Debt
Do you love big feats? The avalanche method could work for you. Unlike the snowball method, the avalanche method works to pay off the debt with the highest interest rate prior to focusing on other debt sources.
- Divert the minimum payments to every account.
- Add extra cash to the account with the largest interest rate.
- Immediately after you conquer the debt, move on to the next debt amount incurring the highest debt fees. Complete this process until your debt amounts are resolved.
Balance Transfers to Pay Off Credit Card Debt
You can use the balance transfer method with either of the two aforementioned methods (snowball and avalanche), but it’s a perfect fit for the avalanche method.
It involves the movement of funds from one account to another. Transferring the balance of credit cards with high-interest rates to those with smaller interest rates helps you pay less in interest over time. Basically, you move all of your debt amounts to a credit account with the smallest interest rate.
Want to see how the balance transfer method works? Click here
Personal Loan to Pay Off Credit Card Debt
While incurring more debt isn’t a good idea, missing a payment deadline hurts your credit score.
It is wise to pay off the minimum balances and your other debts on schedule in order to avoid a financial penalty, including a reduction in your credit score. Sometimes paying a debt with a personal loan makes perfect sense.
- Don’t close your credit cards. Keeping your credit cards open will improve your credit utilization and average age. The only time you should close your account is to avoid annual fees.
- Stop spending money on your paid-off credit
Like the idea? Here are the benefits of a personal loan method.
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Debt Settlements to Pay Off Credit Card Debt
People with outstanding debts often opt-in for a one-time payment. The debt settlement method brings both parties (creditor & debtors) to the table. The main topic of discussion becomes how to settle partial payment without paying in full.
But terms and conditions apply. Clients who are eligible for this offer are those who have been victims of job loss, medical misfortune, or divorce.
Bankruptcy to Get Rid Off Credit Card Debt
Bankruptcy is a legally valid and recognized condition of insolvency of a person or agency. However, this will be notified to all credit bureaus, it cost no extra money and can help even with the smallest debt. This might affect your credit as the credit bureau will receive notice from original creditors, debt collectors since there is no statute of limitations.
This should be your last resort. It’s a fair option for those who’ve had enough and want a new start. Bankruptcy takes time, effort, and even money to recover from. You need to seek counsel before rescinding such a decision.
There are two types of personal bankruptcy.
- Chapter 7 — The debtor is told to surrender some of his/her properties.
- Chapter 13 — The debtor is allowed to keep his/her properties.
Need to know the pros and cons of declaring bankruptcy? click here.
Above all, the money habits that you maintain to go a long way in determining how long you’ll stay in debt. If you discipline yourself and work smart to save and plan for your financial future, your journey to becoming debt-free can be efficient. These are some of the top options regarding the best way to pay off credit card debt.
Published April 04, 2019; Updated July 31, 2019