Credit cards can be a great way to find great rewards programs and get the money you need in an emergency. You can earn things like cash back, travel miles and much more through credit card rewards.
However, credit cards also open the potential for getting into debt. And with high debt can come high interest rates. These high interest rates can make paying off debt even more challenging, as more of your money goes to pay off the interest in addition to your initial balance.
Trying to pay off debt can feel like an overwhelming, uphill climb. But with the right strategies and mentality to tackle it, getting that debt paid off is possible. To help, here we share five fast ways you can pay off your high-interest credit card debt and get on your way to financial freedom.
1. Tackle the Highest Interest Rate Cards First
Pick out the credit card with the highest interest rate. Take care of that source first. This is helpful in eliminating those balances that require higher payments because of the extra interest added on. When you lower the balance on such accounts, the amount of interest you pay decreases, as it’s based on a percentage. Also make sure you’re paying more than just the minimum payment amount toward your balance. Increasing that amount allows you to reduce your balance faster. To get out of your high-interest credit card debt, tackle the highest rates first and get them out of the way.
2. Use a Balance Transfer Account
Credit card companies offer different interest rates for different reasons. To help you tackle your debt, some companies offer a balance transfer account, which means you can transfer your balances all onto one account. This can help you lower the amount of interest you may pay on the account, as many companies offer new sign-on benefits for the first few months or so. Your eligibility for a balance transfer account depends largely on your credit score, so be sure that’s in good shape before you apply. Credit card companies like Discover and Citi have programs specifically designed for your situation. There are also cards where you won’t have to pay an extra fee for utilizing this balance transfer feature, thus saving you even more in the long run.
3. Pay Off With Momentum
Another strategy often used in paying off debt, particularly with accounts with high interest, is in paying off the smaller debt balances first. You’ll gain momentum from checking off those smaller accounts first, thus reducing the number of balances you’re carrying. Reducing the number of high interest credit card balances you maintain can make paying off this debt a much less daunting feat and come as more manageable with your finances. Create a check-list of your debt repayment amounts and cross off the balances as you go to see your progress toward greater financial health.
4. Get a Personal Loan
If your credit is in okay shape, you may want to check out a personal loan in looking for other opportunities with lower interest rates. With a personal loan, you can essentially transfer your credit card debt to a personal loan that can have a lower interest rate, thus saving you from paying excess amounts of interest on your balance. Personal loans are available through banks and credit unions, as well as other online sites dedicated to serving clients like you and equipping them to get rid of their burdensome credit card debt.
5. Add In Your Extra Funds
When you follow a budget, be sure to incorporate a line dedicated to debt repayments. And stick to it. And when you find other surplus amounts that you can use to boost your savings, add it in to your debt repayment plan. Find opportunities to get extra savings you can contribute, such as in couponing, cash back apps and much more. Pick up a side hustle to bring in a little extra cash and pay off your high interest credit card debt faster. Get a raise at work? Put that bonus back into taking care of your debt so you can enjoy being debt-free down the road. Find more ways to cut out unnecessary spending in your weekly or monthly budget and use that extra money to put toward paying off those high-interest balances. While this step takes discipline and motivation, the benefits you’ll receive in being free from credit card debt will be worth it.
Get Rid of Your High-Interest Credit Card Debt
Credit cards can be great, convenient tools. But credit card debt doesn’t need to be part of the equation. Discover which debt repayment strategy works for you and get to getting rid of that high interest credit card debt and on your way to financial freedom.