Many people believe that learning how to pay off credit cards debt quickly is just a myth. However, it is easier then you might think and in this article I will give you tips and advices on how to do it.
Struggling With Payments?
Few things are more discouraging than struggling to make payments on multiple credit card accounts each month when the balance doesn’t seem to go down at all.
If you have high interest accounts, almost all of your minimum payment may go toward interest charges and only a few dollars would be applied to your debt.
Don’t give up. There are ways to not only manage that crushing debt but to start seeing those balances fall faster and faster with each payment you make. It won’t cost you much more each month – just a few extra dollars can make a big dent in that debt before long.
Lenders are Raising Interest Rates
Lenders have been raising interest rates beyond reason or common sense for the past few years and this trend seems to be increasing. Why not beat them at their own game? The quick pay off method explained below has proven to work for thousands of consumers and it will work for you as well.
Let’s assume you have four different credit cards. List all of your credit card accounts by interest rate with the rate at the top. We are going to focus on the first account.
For the other three accounts you will make the minimum payment due (on time) each month. Other than that, forget about those three debts.
Go through your budget (you do have a budget, right?) and find every dollar you can spare. Cut back on some items if you need to in order to find extra cash you can use each month.
Take that amount and add it to your minimum payment every month for the debt at the top of your list – the high interest monster.
The more money you can throw at that debt, the faster the balance will go down. Every month you will see the balance go down by a larger amount even if you send the same extra $20 dollars a month.
If you can find an extra $100-200 a month the progress will amaze you. The balance on that high interest account will begin to fall and month by month the debt will disappear at an increasing rate.
Ready for The Real Magic?
You’ve paid off that first high interest debt. Do you celebrate and go shopping? No, you don’t. Instead, you take the total amount you were paying toward that debt (including the minimum payment for that account) and you add it to the minimum payment of the second debt on your list. The balance will begin to drop like a rock.
That’s not all. Credit card number two is now paid off and you are taking the total you were paying on #1, add the minimum payment you were making on #2 and you are putting all of that toward card #3. Whoosh!
This isn’t high finance. There are only two elements that are crucial when it comes to learning how to pay off credit cards in record time:
1. Stop using all of your credit cards now. To eliminate debt you must first stop adding more debt.
2. Stick to your budget and find a specific amount of extra money to apply toward the card you are attacking. Make that dollar amount part of your monthly budget.
When you have high interest credit card debt making minimum payments is like throwing money into a deep hole you can never climb out of. Throw any extra money you can find toward the account that is your target this month and watch that debt melt away!