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

Are you in a constant state of “treat yo self”? Are rising gas prices & insane grocery bills putting you in a pinch? Maybe you had a divorce, medical issue or other emergency where you didn’t have the savings to cover the costs? If so, the arrival of your monthly credit card bill may send you into a spiral. If you aren’t paying it off monthly & you find the balance creeping up, it can feel like falling into quicksand, but never fear! Here are a few strategies to get it paid down!

Highest Interest Rate First

If we are talking about more than one card, it’s important to know what you are paying as an interest rate. Allocate your largest payment to the highest rate. Once this is paid off, go to the next highest & so on until you have them all paid off.

Make More Than The Minimum Payment

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 and notice how much faster the process is when you pay even just a little more. Every extra dollar saves you interest down the road.

Look Into 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 in the required terms of the offer, before the rate goes up.

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

Once you have a game plan for paying off the balance, it’s important to strategize to reduce your spending to prevent the balance from creeping up again. Review your spending and look for patterns. Look for places where you can:

Use cash

Cancel subscriptions

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

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

Has your credit card balance ever gotten out of control? What did you do to pay it off and get your spending back under control? What tools would keep you out of that situation again?

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