For most people, credit card debt is the most expensive debt you’ll have. Aside from payday loans, credit cards typically have the highest interest rate of all borrowing.
That makes them a priority to pay off if you owe them money.
That’s often easier said than done. With rising costs and wages that can’t keep up, it’s tough to keep your head above water.
However, the hard truth is that if you have credit card debt, it isn’t going anywhere.
You’ll need to pay it off eventually so you may as well take control of it now. That’s what I’m going to help you do today.
I won’t tell you how to pay your debts but I will offer some tips to help pay them off faster if you want to.
Here are 4 actionable tips anyone can use to pay off credit card debt faster.
1. Prioritise one card at a time
If you owe on multiple cards, write down how much you owe on all of them and their APR (Annual Percentage Rate).
If the amounts you owe are similar for each card, you’ll want to pay off the most expensive card, the one with the highest APR first.
If you owe more on one card than all the others, prioritise that instead.
Pay the minimum monthly payment on all cards to keep your credit score intact. Any spare cash you may have at the end of the month, or can raise, should use used to pay down either the most expensive card or the card with the most debt.
(There is another way, called the snowball method. I’m going to cover that in another post.)
2. Pay more than the minimum payment
Credit cards set minimum monthly payments to make sure you’re paying off the card, even if it’s a little at a time.
Trouble is, if you’re just paying the minimum and you owe a lot, you’ll probably just be paying some of the interest and not much of the actual debt.
If you can possibly manage it, pay more than the minimum. This should settle the interest due that month plus pay down a little of the actual debt.
If you can pay more than the minimum payment, you’ll do two things. One, pay less interest overall as you’re gradually paying off the amount you owe. Two, pay the actual debt down rather than just putting it off for another day.
3. Curb your spending
This is one of those tips that nobody wants to hear yet must be shared. To truly gain control over credit card debt, you need to gain control of spending.
I’m not judging here. Your life is your own as are your reasons for spending.
But, to get on top of your debt you need to tackle the root cause. That’s spending.
Whether you cut spending altogether or set yourself a monthly budget, it’s entirely up to you. As long as you take control, stop acquiring debt and start paying it off, life will gradually improve.
If you struggle, cut up your credit cards. A harsh measure for sure, but a useful way to stop some of your spending.
It won’t stop you spending online, but if you’re an in-store shopper, it might help.
4. Consolidate your debt
My final tip for paying off credit cards faster is to consolidate all of them into either a 0% credit card or personal loan.
Debt consolidation isn’t something to be done lightly as it will initially involve taking on another credit card or personal loan.
However, once everything has been set up, you’ll have one debt to pay each month and one (hopefully lower) rate of interest to pay.
It’s simple to do as long as your credit score is still good:
- Apply for a 0% credit card or personal loan sufficient to pay off all your other cards
- Pay off everything so you’re just left with that new card or loan
- Prioritise paying off that debt as quickly as possible
You’ll probably find having one debt and one payment easier to manage than having multiple cards.
You’ll also be paying less interest. More of the money you’re paying goes to paying down that debt rather than paying interest.
As long as you manage your finances and avoid accruing more debt, you’ll be debt free in no time.
Paying off credit cards faster
I appreciate that the process is simple but the practicalities of finding more money each month to pay debt will be more difficult.
However, as I said earlier, the debt isn’t going anywhere. Credit card companies don’t forgive debt and will expect their money back.
Unless you’re in real trouble and get debt help from Citizens Advice or somewhere, the card will need to be paid and the debt settled.
Taking control and being proactive about it will save money and sleepless nights in the long run.
That makes it worth trying, right?
