4 Fast Ways to Pay off Your Credit Card Debt
If you’re one of the millions of Americans dealing with credit card debt, you’re probably doing your best to get out of it. Often though, your best isn’t enough as you watch your balance grow and grow to a number that you can hardly believe.
The anxiety sets in from not knowing when it will end, and not knowing how you’re going to pay the rest of your bills as your credit card debt continues to grow.
Getting into credit card debt is quite hard, digging your way out of it is rather hard. It takes the right strategy, the right attitude, and quite a bit of discipline, but it is in no way impossible.
Luckily, there are quite a few ways to pay off your credit card and get out of the crippling debt that you may be dealing with. Continue reading to find which strategy is right for you.
1. The Balance Transfer Credit Card
This is one of the most common strategies that people struggling with credit card debt use to get out from under your debt. A balance transfer card essentially refers to a new credit card that offers a lengthy 0% APR promotional period that allows you to transfer your balances from your other card onto your new card.
Because your new card offers the 0% APR promotional period, you’ll get the opportunity to pay of huge amounts of your debt while not having to deal with interest fees.
While it is a great option to attack your debt, there are some things to be aware of before you go this route.
First, balance transfer credit cards are typically only available to people with good to great credit – typically a score of 700 or higher will be enough to qualify.
Secondly, you may not be able to transfer your entire debt to a single card. Most cards set a maximum transfer limit and if your debt is greater than that, you may have to open multiple cards in order to initiate a full balance transfer.
Thirdly, if you fail to pay off your entire debt by the time the promotional period comes to an end, you will likely incur interest on whatever debt you have left.
2. Apply for a Personal Loan
Another way to get a break from the heft interest rates that many credit cards have is to take out a personal loan. This is called debt consolidation and it basically means replacing your credit card debt with debt from a different lender that offers a much more attractive interest rate.
The key to securing the right personal loan for you is to shop around, contact numerous lenders, and get pre-approved without hurting your credit score. Make sure to pay attention to all the fees connected to a given loan and not just the interest rates.
A personal loan is a great option for people who understand why they got into credit card debt in the first place, and know how they’re going to avoid it in the future. What a personal loan offers that a balance transfer card doesn’t is time. Unlike the 0% APR promotional period of a balance transfer card, personal loan interest rates will stay low as long as you make your payments. So, if you can do that, you’ll be well on your way to a debt-free life.
3. DIY With the Snowball or Avalanche Methods
If you don’t want to transfer your balance or take out a personal loan, another option is to utilize either the debt snowball or debt avalanche.
First, let’s talk about the snowball method. Luckily, It’s quite simple! Essentially, you start by making the minimum payments on all your debt, and focusing all of the rest of the available money you have to pay off your cards to the smallest debt. Once you pay that debt off in full, you move on to the second smallest debt, and so on until you are finally able to tackle the card with the largest amount of debt.
The reason this method of paying off debt is so popular is because it allows you to see results right away. It’s great if you’re experiencing some debt fatigue and need a morale boost to get even more motivated to pay off your debt.
Second, let’s look at the avalanche method. This tactic to paying off your debts differs from the snowball method because instead of focusing on your lowest debt first, you’re actually focusing on your highest interest rate first.
Say you have one card with 20 percent APR, another with 17 percent APR, and another with 15 percent APR. If you were to employ the debt avalanche method, you would begin with the 20 percent APR card and pay it off in full. Once that was taken care of, you would move to 17 percent, all the way down the line until you are debt free.
4. Find Another Source of Income
Sometimes, the answer to getting out of credit card debt is quite simple. Just make more money! If you break down your budget and find that you could be a whole lot more comfortable with just a bit more money, it might be time to look for a side gig.
Of course. if you’re already working a full-time job and still find yourself struggling to pay off your debt, this option probably isn’t for you. However, if you’ve got time to kill and can use it to make money, consider it! Get a job that you can do from home during your free time, or simply apply for a second part-time job to help make ends meet.
In today’s gig economy, there are a ton of ways to make a couple extra hundred bucks throughout the month that definitely add up over time. For some, that can be all the difference between a living under a mountain of debt, and enjoying a debt-free life.