Are you overwhelmed with credit card debt? Do the bills keep piling every month? Here are three simple ways to eliminate credit card debt.
- Focus on one credit card at a time. You might have several credit cards with different balances. The best way to pay down and eliminate credit card debt is to pay down the credit card with the smallest balance first. That way you can get rid of that credit card the quickest and then focus on the next credit card afterward. Make sure you are still making payments to all of your current credit cards as to avoid penalties and hurting your credit score.
- Minimize your debt interest. Many credit cards charge interest in excess of 15% and some charge higher than 24%. A very simple way of reducing your interest rate when this occurs is to do a balance transfer over to a new credit card. Credit card companies may charge a 3% fee for this service, but this beats the higher interest rate that you normally would have been charged. If you have no other option, then asking your credit card company to reduce the interest rate charged may work. If you have a high credit score and a history of paying on time, the customer service rep may shave off a few percentage points off.
- Make frequent payments. The interest on a credit card is charged on a daily basis, so paying your credit cards twice a month as opposed to once a month can shave off further interest expenses. In addition to the three ways above, you will most likely need to reduce your expenses, save more, and pay down your credit card balances. This may sound like a no brainer, but the habits that got you into the credit card debt spiral need to be fixed before you hope to wipe all of your debt. This means forgoing extra purchases, not eating out, and not going on too many vacations. It’s not the end of the world staying inside a few weekends and saving your money, and you won’t regret paying off your credit cards when that time comes.