Credit cards can be a useful tool. They help you build your credit score, increase your buying power, and offer rewards like air miles or cash back. But, if you do not carefully monitor and check your spending, your credit card debt can quickly pile up. Eventually, it might get to the point that it is stressful and seems unmanageable. These steps, which outline the fastest way to pay off credit card debt, might help:
Step 1: Identify Your Credit Card Debts
You need to understand your complete financial position if you want to pay off your credit card debt quickly. This is the information you need about each of your credit card debts:
- Who you need to pay.
- How much you owe in total.
- How much you owe each month.
- What the interest rate is.
Step 2: Review (or Create) Your Budget
Your budget helps you figure out how much money is coming in – and where it is going. It gives you a complete picture, so you can work out realistically how much of your debt you can pay off.
Step 3: Decide On A Strategy To Pay Off Your Credit Card Debt Fast
There are many different strategies that promise to be the fastest way to pay off your credit card debt. The truth is, different strategies work better for different people. If one of these strategies does not work for you, do not despair. Try again using a different strategy.
Strategy 1: Tackle Debts With The Highest Interest Rate
Paying off this credit card debt first (and fast) helps you avoid paying more interest, so you pay less in the long run.
Strategy 2: Pay Off Credit Cards With The Lowest Balance First
Paying off your total balance feels like a win – and that feels good, which helps you stay motivated. Close these accounts once you pay them off to help yourself stay on track.
Strategy 3: Consolidate Your Debts
Consolidating your debts means moving all your debts into one place, either using a loan or one credit card (with the lowest possible interest rate). You use this credit card balance transfer to pay off your other debts and cancel all your other credit cards. Then, you tackle the one loan. Since there is only one payment, you are less likely to miss payment deadlines and it makes your overall position more clear and more manageable.
Strategy 4: Contact Your Creditors
Your creditors want you to pay them, so they are often willing to work with you to manage your debt – if you let them know what your situation is.
The specialists at 4 Pillars Debt Consulting can help advise you on this. We will work with you to get a plan in place. Unlike other debt agencies, we do not work for your creditors – so you know we always have your best interests at heart.
Step 4: Avoid Taking On More Debt
It is important that you think about whether you will be able to pay off any increase in debt before you take that debt on. Learning to do this is an essential step in gaining control over your finances.
If you are feeling overwhelmed by your debt, it is time to stop increasing the amount of debt you have. Do not apply for another credit card to continue spending and do not take out a loan to fund new purchases.
Step 5: Know Where and When To Get Help
If you find yourself dodging calls from creditors, having your credit cards declined, or frequently paying bills after their due date, you could benefit from help with your debt.
The empathetic experts at 4 Pillars Consulting have helped Canadians reduce their debt by more than 1 billion dollars. 97% of our clients are now living life debt-free – and much happier than they were with mounting debts.