How To Pay Off Credit Card Quickly

Reduce Your Credit Limit

To avoid the temptation to overspend on your card, ask your credit provider to reduce your credit limit. You can do this online, by phone or by visiting a branch. In most cases, it takes between one and two business days.

If you need to increase your limit to buy something special, aim to pay it off quickly. Then reduce your limit again to a manageable amount.

Which Credit Card Payoff Strategy Is Best For You

Research aside, its important to note that every debt situation is different, and so is every debtor. You know yourself better than anyone else. So, youre in the best position to decide which credit card payoff strategy is right for you.

If youre having trouble deciding, here are a few questions you might want to ask yourself.

Most of all, keep in mind that theres really no such thing as a bad debt elimination strategy. As long as youre chipping away at your high-interest credit card balances and you avoid new debt, youre taking a step toward a stronger financial future.

Easy Guide To Paying Off Credit Card Debt Fast

To enjoy your financial freedom and keep your annual income, you should find ways to pay off credit card debt fast. There are many different ways you can achieve this. Here is a list of tested and tried methods:

Avalanche Method

Experts say that a good technique to use to get out of debt, especially if you have multiple credit cards, is to pay the one with the highest interest rate first. Pay the minimum installment on all your credit card accounts. Any money that can be spared should be used to pay the account with the highest interest rate. Once that account has been paid off, you move on to the one with the second-highest interest rate, and so on.;

The avalanche method allows you to save money on interest.;

Snowball Method

The snowball method can be used when you have a bunch of smaller bills coming in every month. These bills can include doctors bills, borrowed money from family members, in-store credit, or money owed for products you bought. Start paying off your little debts before moving on to the bigger amounts.;

The debt snowball method is one reliable way of how to pay off debt quickly. Seeing little debts disappear quickly will remove some pressure while achieving faster progress in paying off your debt.;

Filing for Bankruptcy

Bankruptcy cases are handled by federal courts, so its always best to contact a professional service to help you through the process. Always check other ways on how to pay off credit card debt fast before you decide to file for bankruptcy.;

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Consider A Low Rate Balance Transfer

Many financial institutions offer a balance transfer card that starts with a low introductory rate for a specific period of time.

A balance transfer card that offers a 0% promo rate on your credit card debt for 12 months can save you thousands of dollars in interest, particularly if you pay down as much of the principal as you can during this interest-free period.

Balance transfer cards often come with a transfer fee of 1% to 5% of your balance. Read the fine print to know what the fees are and for how long the low rate is available.

Examples of balance transfer cards in the U.S. include:

• Discover It Balance Transfer Card
• BankAmericard Credit Card

Make Extra Payments Using New Money

Cutting expenses can only go so far why not find new money to pay your debt?

Working an extra day on overtime every other week could bring in thousands of dollars annually. For more ideas, see my list of ways to make more money from your job, or try some of these ways to make money at home.

In general, any unexpected or extra income should go toward your debt including tax refunds or monetary gifts.

Then, sell everything you dont use on Craigslist or have a garage sale. Use the money you raise to pay down those balances.

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Should I Pay Off My Credit Card Debt Immediately Or Over Time

• The Bottom Line

If you’ve come across extra cash and have credit card debt, you may wonder whether it’s a good idea to pay off your balance all at once or over time. You may have heard carrying a balance is beneficial to your credit score, so wouldn’t it be better to pay off your debt slowly?

The answer in almost all cases is no. Paying off credit card debt as quickly as possible will save you money in interest but also help keep your credit in good shape. Read on to learn whyand what to do if you can’t afford to pay off your credit card balances immediately.

The Best Way To Pay Off Credit Card Debt And Get Out Of Debt

You may ask which option is better which option is the best way to pay off credit card debt fast and get out of debt quickly? I would suggest that you go with the one that feels the easiest and most doable. When it comes to money, its so much more than dollars and cents, its about feelings, confidence, experience, history, and practice. The avalanche method may be the most logical option; however, if it feels like its going to take forever , then go with the snowball method, where youll get quicker wins.

Regardless of what you choose for how youre going to pay off your credit cards,;choose something because inaction will just get you further into debt. And if youre lost, need advice, or even a cheerleader,;;and we can help you.

Got debt? Need help?

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Consider A Credit Card Consolidation Loan

Consider this if you have good credit, can secure a lower interest rate, and can pay off the loan before the term is up.

If you have good credit, you may be able to pay off your debt with a , reducing the total amount of interest youll owe.

If you go this route, youll need to use a low-interest personal loan to pay off your credit card company, meaning future payments will go to your new lender. But, unlike with compounding interest for credit cards, a personal loan is paid off in installments; youll receive a lump sum of cash upfront and pay back the loan in fixed installments until the loan and interest are paid off.

Some personal loans charge an origination fee, so keep an eye out for fees you might not be expecting. But Credible makes it easy to see prequalified rates from our personal loan partners in the table below as well as transparency into all fees and rates.

Common Mistakes To Avoid

It can be nerve-racking to find yourself in a situation where you have loads of credit card debt. When we are stressed and under pressure, we tend to make a few common mistakes while trying to pay off our debts quickly. Avoid the following mistakes while dealing with credit card debt:

Using Your Credit Card While Paying It Off

If you want to pay off credit card debt quickly, then you need to stop making new debt. It might be tempting to use your credit cards while they are still active. Instead of keeping them in your wallet, lock them out of sight or even give them to a friend for safekeeping.;

Starting With the Largest Debt First

Dont start off by paying off the largest debt first. Its important to consider other factors like interest rates and APR percentages. Apply the avalanche method to start paying off debt with the biggest interest rate first.;

Taking Out a 401K Loan

Even though some people argue that taking a 401k loan is a good plan on how to get out of credit card debt, we dont advise it. If you can pay it off within a scheduled timeframe, it might not be a bad idea but definitely not advised when you are in financial trouble.;

Borrowing money from your retirement savings account especially if you dont know whether youll be able to pay it back is a serious mistake.;;

Taking Out a Second Mortgage on Your Home

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Using A Credit Card To Pay Medical Bills

Medical bills can be overwhelmingly expensive, especially if you’re uninsured. If you’re having trouble paying your medical bills, negotiate an agreement with the hospital or other company to whom you owe money. Don’t add to your bills and stress by adding exorbitant credit card interest rates onto them. You should also go;through your medical bills a second or third time, making;sure they are accurate and;you understand all the charges.;

Improve Your Credit Score

We looked at how to check your credit report and score for free above. However, if you find your score is low then there are ways to improve it.

Check it for mistakes and get those rectified, registering to vote and ensuring your rental payments count are just a few of the ways you can easily improve your score.

Find out more: how to improve your credit score

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Pay Off Debt Before Saving

While it’s good to have a financial cushion for use in emergencies, there’s little logic in having savings if you also owe money on a credit card or overdraft.

The rates available on the best instant-access savings accounts are significantly lower than the average interest rate on a credit card, which typically will have an APR of 19%.

Using your savings to pay off your borrowing could save you hundreds of pounds a year in interest charges.

Separate Debts And Savings To Avoid Them Setting Off

If you have debt and savings with the same provider then it has the right to set-off and use money held in your current or savings account to pay off debt such as a credit card or personal loan.

While its unlikely to happen, it can, especially if youre juggling your debt repayments, and would have a big impact on your personal cash flow.

The best way to avoid it is to move your savings to a different financial institution .;

Find out more: use our free tool to check if your savings and debt are with the same financial institution .

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Pay The Minimum Payment On Your Card

The minimum payment on a credit card is the lowest amount youre asked to pay before the due date. If you bank with CommBank, its usually $25 or 2% of your closing balance and youll avoid late fees by paying this. You need to be aware that the minimum payment is a fraction of your whole balance – and if you only pay the minimum rather than your total owing, youll incur more interest.;

Get A Side Hustle To Increase Your Income

Scraping together extra income can increase how much you can put toward your debt, accelerating your payoff.

Look into legitimate side hustles. Some jobs can be completed in less than an hour, like user testing for websites and apps. Others, like freelancing, will take longer, but may earn you more cash.

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More Tips On How To Pay Off Debt

Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

Nowadays, financial stress is one of the most troublesome weights in life. If youve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

Many people say that money is not the ultimate goal of life. While thats true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

In this article, well explain how to capture that financial freedom youve been looking for. Read on to learn the secrets to financial freedom.

There Isnt One Right Way To Pay Off Credit Card Debt But There Are Some Tried

Those methods fall into two broad categories ; ;either pay off each debt individually or consolidate all of your debts into a single monthly payment.

Lets take a look at four popular strategies for paying down credit card debt, along with the pros and cons of each, to help you decide which option is best for you.

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Switch To A Cheaper Mortgage

Mortgages are secured debt. This means when you take out the loan to buy your home, you offer your property as security.

As a form of debt, theyre also much more of a long-term commitment.;That doesnt mean you need to stick with the same provider for the duration of the mortgage. In fact, if youre coming to the end of a fixed-term deal or youre unhappy with the standard variable rate youre paying then remortgaging could be a good way to lower your monthly repayments.

Find out more: remortgaging: how to save thousands on your mortgage

What About Bankruptcy Or Debt Settlement

If you dont have mountains of debt, bankruptcy is rarely worth it and you cannot usually relieve yourself of student loans or tax debt. Generally, it is only a smart option if a catastrophe hits you, such as a major illness that racks up medical bills or an extended bout with unemployment due to illness. Additionally, a Chapter 7 bankruptcy can sit on your credit report for up to ten years.

What about debt settlement? Using this repayment method, your payments have to be super behind and possibly even in collections. At that point, you negotiate pay-off amounts with your creditors. You can often pay off your debt with a lower amount than the full amount, but you have to pay the difference in federal taxes as a gain. So, if your debt was $10,000 and you paid $6,000 as the negotiated pay-off amount, you have to pay taxes on the $4,000 difference. You will also negatively affect your credit report making debt settlement not a good option for most.;

Paying off your credit cards and becoming debt-free can be done. Many have done it. You can do it too! You just need to pick a plan and stick to it. Once you pay down your debt, you can start working on your rainy day fund.

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Save A $1000 Emergency Fund

If getting rid of those credit cards freaks you out because you use them as an emergency fund, then get yourself an actual emergency fund as fast as possible.

Save $1,000 quickly. Leave it in savings as a buffer between you and those life happens moments. And trust us, its way better than a credit card. If you have an emergency and pay cash, you wont be charged interest. Boom.

How Do I Pay Off Debt With Debt Settlement

Debt settlement is another option you can consider when youre ready to eliminate your credit card debt. This strategy usually works best for people who are already past-due on their credit card payments and can afford to make large, one-time settlement payments to their creditors.

You can settle debts on your own or you can hire a professional debt settlement company to handle the process for you. If you choose to hire an outside party, you should do extensive research to avoid scammers and exorbitant fees. Be aware that hiring a company to do this is not necessary, and could end up costing you a lot more money. Learn what to watch out for at the FTC Consumer Information website.

• Step 1: Examine your debts, and determine your ability to repay them over time.
• Step 2: If you think your debts are insurmountable, and youve decided bankruptcy isnt the right response, you can either attempt debt settlement yourself or hire a company. The worse your situation the more leverage you might have, because your creditors will see that theyre less likely to be paid in full.

If you go the DIY route:

Or, if you prefer to work with a debt settlement company:

This option usually only becomes available after its become clear that youve been struggling to pay your bills, like if youve started to accrue late payments or havent been paying at all.

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Keep Track Of Your Spending

Take charge of what you owe by keeping track of money coming in and going out. If you know what you’re spending, it’s easier to keep up with bills and credit card payments. You can track your spending in a few different ways.

Savannah’s smart choice

Savannah owes nearly $10,000 in total on her three credit cards. The average interest rate on the three cards is 20%. The minimum monthly repayment for the cards is about $200.

Savannah works out that if she only makes the minimum repayments each month:

• It would take 61 years to pay off the three cards.
• She would pay over $42,000 in interest.

Instead, she decides to pay $300 a month. This means:

• It will take about four years to pay off the three cards.
• She will save almost $38,000 in interest.