You usually do not get into credit card debt overnight, so you also won’t be getting out of credit card debt overnight either. However, there are some options to help you pay off that debt faster than just making those minimum payments. That method can take upwards of 20 or even 30 years. We’re going to discuss five different options that may be beneficial to your financial situation and something you may not have considered before.
1. Pay More Than The Minimum –
The Consumer Financial Protection Bureau and financial advice experts recommend consistently paying as much of the credit card total balance as possible each month. It would be ideal to pay off the total balance completely each month, but that’s very rarely a reality that anyone can obtain.
What’s the reasoning behind this advice? One can get out of debt faster if one pays more than the minimum monthly payment that’s due. That’s because repaying more at once reduces the credit card amount and helps avoid incurring further interest fees. Interest costs can be kept to a minimum by making payments more significant than the minimum amount required. In addition, if the interest one pays is low enough, the payments will be, too.
2. Take Advantage Of Balance Transfer Promos –
Several credit card issuers provide bonuses or other incentives for making the switch to entice customers to switch to using their card instead. If someone is seeking some quick respite in exchange for a one-time, flat-rate balance transfer fee, keep an eye out for them. Occasionally you can get lucky and find a zero fee balance transfer promo.
Opening a new credit card designed to provide this service, or using an existing credit card, are both viable options for obtaining this temporary respite. One could save money in the long run if they choose this route if they think it will take them over a few months to pay back the existing credit card debt.
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3. Take Out A Personal Loan –
A personal loan could be an alternative way to eliminate credit card debt if one does not have stellar credit. It is necessary to inquire at the credit union or local bank, or conduct an internet search, to discover whether they provide personal loans and if the terms are favorable.
Personal loan annual percentage rates (APRs) are often several percentage points lower than credit card APRs, so while one will still be paying interest, it will be at a lower rate. It is also vital to simplify the monthly financial obligations by consolidating the debt into a single payment. Even better is reaching out to family or friends for a personal loan with no interest attached if you have that option.
4. Consumer Credit Counseling Service –
Someone may reduce the interest rates and the monthly payment amounts by contacting a Non-Profit consumer credit counseling agency and asking about their Debt Management Program. A Debt Management Program (DMP) is a great way to pay off your debt as quickly as possible while saving money in the long run.
A Debt Management Program works by contacting your creditors and sending out new payment proposals that include reduced interest rates (sometimes as low as zero percent) and waiving all fees. Participants are usually on a DMP for 3-5 years depending on the amount of debt they have to pay off. You can find out more about our Debt Management Program by clicking here.
5. Find a 0% APR Offer
When utilized effectively, a brand-new credit card offer that does not charge interest might be a helpful instrument. A person could make new charges to this account while at the same time devoting a higher portion of the monthly income to the repayment of the current debt with the high interest rate.
Cautious management is necessary to avoid making the same mistakes in the future concerning this procedure, even if one wants a credit card offer that does not accrue interest for short-term debt relief.
If this does not happen, that person could return to where they started, attempting to pay off a mountain of credit card debt. Nevertheless, it may provide breathing space in the near term and buy some more time to get the financial situation under control.
In Conclusion –
The burden of credit card debt might be difficult to bear, but it is not impossible to eliminate. It just may take some time and discipline. However, many individuals who can successfully adhere to a Debt Management Program can find themselves debt-free in a few short years and with a better credit score to go along with it. Also, that sense of relief they experience once they have paid off all of their debt makes the process worthwhile. If a person carries a significant amount of credit card debt, there is no better time than the present to begin working toward paying it off.