Credit Card Debt: Strategies for paying it off and keeping it under control

Are rising prices putting you in a pinch? Maybe you had a medical bill or emergency and you didn’t have enough savings? If so, the arrival of your monthly credit card bill may cause you significant anxiety. If you aren’t paying it off monthly & the balance is creeping up, it can feel like falling into quicksand, but never fear! Here are a few strategies to get that balance paid down!

Highest Interest Rate First

If you have more than one card, it’s important to know what you are paying as an interest rate. Make note & allocate your largest payment to that card. Once it's paid off, go to the next highest and so on.

More Than The Minimum

Credit card companies are required to have a little chart on your bill that shows how long it would take to pay off the balance only making minimum payments. Refer to this & notice how much faster the process is when you pay even just a little more. Every extra dollar saves you interest.

Balance Transfer

Transferring balances usually has a fee (3-5%), but depending on your balance, that fee may be less than you would pay in interest by leaving it where it is. Additionally, if you have recently gotten a card, sometimes they waive the transfer fee for a period of time. Look at the fine print & make sure you can pay it off before the rate goes up.

Check out our free, downloadable worksheet to collect all the important basics, like balances, interest rates & minimum payments (resources link in bio). For the complicated math, we recommend undebt.it to calculate payments, interest rates & fees.

Once you have a payoff plan, it’s important to reduce your spending to prevent the balance from creeping up again. Look for spending patterns & see where you can:

Use cash, not credit

Cancel subscriptions

Negotiate bills (Cable, cell & internet can all be negotiated)

The most important thing you can do is commit to the process. With a plan & some adjustments to your spending habits, you’ll have balances wiped out in no time!

What tools do you use to keep your credit card balance from getting out of control? Let us know in the comments!

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