Credit Card Debt can cause financial ruin if not cleared soon. At times you may find that there is no change in your debt though you have been paying your bills. This could be due to interest and any automated charges.
Here are the few ways to settle/pay off your credit card debt fastly,
- Estimate your debt
- Deal with one card at a time
- Pay more than the minimum amount
- Use your savings
- Look for extra income
- Eliminate unnecessary expenses
- Take up a balance transfer card
- Take out a personal loan
Estimate your debt
This is an important step. Write down all your outstanding card dues, monthly expenses and any financial commitment. If you own more than one card, then estimate the debt of each card. Find out the interest rate, minimum due amount, card limit and so on.It will help you to know exactly what you owe on your card. This estimate is crucial to move to the next step.
Deal with one card at a time
If you own more than one card, you can tackle your debt in two ways. First, see which card carries the smallest balance and pay off that debt first. You can use the money that you were paying for that card to pay the next smallest balance.
Another way is to see which card charges the higher interest. Start paying for that card while still paying minimum payments for your other cards. If your high-interest card has a hefty balance it make take some time to clear your debt, but ensure that you stick to the routine of making regular payments.
Pay more than the minimum amount
Paying more than the minimum amount can help you to clear your debt sooner. Whether you own just one card or multiple cards, try to pay little extra than your minimum due amount. This way your card balance will reduce sooner and you will pay less interest.
Use your savings
If you have savings, use a part of it to settle your outstanding dues. If you receive a hike in your salary or a bonus, use that money to pay off your card. You can even use your income tax refunds to make payments.
Look for extra income
See whether it is possible for you to earn more income such as a part-time or a freelancing project. Use the earned money to pay for your cards.
Eliminate unnecessary expenses
Create a budget to identify areas where you can cut down your expenses. Focus on clearing your debt first instead of indulging in luxuries. Eliminate any unnecessary expenses and use that money to pay your card bills.
Take up a balance transfer card
Consider a credit card balance transfer. Some banks offer 0% interest rates on such cards for a specific period. You can transfer the balance to new card and save money on interest for the specified time period. An advantage with balance transfer cards are that you can choose a suitable plan that works with your budget.
Take out a personal loan
Consider a personal loan to settle your card debt. You can pay off your card debt at once with a loan. You need to be ready to make monthly instalments to repay your loan. Not paying your loan on time can incur extra late payment charges.
Check the interest rates and quotes carefully before you apply for a loan. You also need to consider the fact that if you are drowning in card debt, then your credit score may make you ineligible for a loan.
Clear Your Debt
Ensure that your clear your debt as soon as possible. Debt can affect your credit score negatively where it would be difficult for you to get financial products later. Debt also causes emotional and financial damage. Use the tips to settle your card debt quickly.