If you are carrying some credit card debt, then it is in your best interest to accelerate your debt pay down on those cards. Each month you carry a balance on your credit cards, you get charged interest on that balance, which can amount to hundreds, if not thousands of dollars at the end of the year. This basically means you are paying a hefty sum just for the privilege of carrying credit card debt. So instead of continuing this trend, use some of our tips to speed up the process of paying down your credit card debt by putting the payoff process on turbo speed.
Transfer High Interest Balances
If you have good credit, you might want to consider shopping around for some zero or low interest balance transfer offers. This will allow you to transfer some of your high interest balances and save on those high interest charges each month. Just be sure to check out the fee amount before you make any balance transfers.
Focus On The Highest Interest Rate First
Experts agree focusing on cards with the highest interest rates is the best financial decision when attempting to pay off credit card debt. The logic behind this is the cards with the higher rates are costing you the most in monthly interest charges, so getting rid of them first lowers the financial burden the most.
Trim Your Other Expenses
To free up more money for credit card payoff, look at your family budget and try to find ways to lower your other expenses. You can even try to lower the bills enough where you can live on just one income. Some easy places to make some cuts include the cable bill, entertainment expenses, subscription services, the cell phone bill and dining out.
Change Your Payment Schedule
Just because your credit card bill is only due once a month does not mean you can’t make more payments than that. Try making a payment every two weeks, which gives you an extra payment at the end of the year. It also results in a slightly lower interest charge each month.
Borrow From Your Savings Account
If you have a savings account earning you around one percent interest, why leave it sitting there when you can pay off a credit card with a 19.99 percent rate? Financially, the math makes more sense to use the money from savings to pay off the higher interest debt. Once the debt is gone you can then start rebuilding that savings account again. Just do not borrow from your retirement savings as it can result in a stiff tax penalty.
Get A Second Job
If your lifestyle allows for it, consider taking on a temporary second job to pay off the debt faster. You can use all of the money earned from the job to pay off the debt, in addition to any other extra money that you have to throw at the credit card balances.
By following these tips, you will begin to see your credit card balances rapidly shrink before your very own eyes.
What changes are you making this year to get ahead in your budget? What are your goals for the year?