There are a few strategies to accelerating paying down credit cards. Before we discuss those, let’s acknowledge that it is hard. Credit card debt can creep up, especially during times when income is insufficient for basic needs. Debt can also happen when we deliberately buy items, services or experiences we have not saved for. The interest charged and late charges are responsible for the debt growing.
One of the first strategies is to examine your credit card bill every month. There may be services you are paying for that you no longer use or need. Think about gym membership, streaming services or donations to a charity you no longer support. Cancelling these monthly costs can help.
Write out a list of your credit cards (you can include other debts like student loans), along with the amount you owe, the current interest rate and the minimum payment due. This can be very daunting if you are unsure or scared about your debt level. Using a spreadsheet with formulas showing date paid off with current payment is very helpful and motivating.
The monthly amount you saved in #1, or any extra money can be applied to paying down the loan with the highest interest rate. Maintain paying the minimum amounts on the other cards. Once this card is paid off, take the total amount you were paying on this card and attack the next highest interest card. Repeat until all are paid off.
If you like more instant gratification, take extra money and pay off the credit card with the lowest amount due. After that is paid off, repeat or use the strategy above.
Paying your debt on time will alleviate those extra late charges. You may also find that as you pay your cards off, your interest rates may go down. Paying down debt also improves your credit score that may also lower your interest rates. It is all connected. Update your spreadsheet as you go and see the improvement.
Saving for emergencies in addition to paying cards off is a way to avoid getting into debt. Once you are out of the grind of credit card debt, pay your card balances off monthly. Creating a plan to tackle this debt is the first step. Congratulations on taking it!
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