It is normal to use credit cards these days. But, the nightmare is clearing that debt amount on the final date.
What if we say that there are ways to pay your credit debt off at ease?
On average, Americans have $6,194 in credit card debt, according to the 2019 Experian Consumer Credit Review.
Nobody is happy falling into debts, but it happens under the circumstances. Getting money through credit cards eases our work at that moment, but it has complications.
Even while making timely payments, paying more than the minimum amount has become a hustle for the majority.
So what can be done to find a solution to this issue? To put it in simpler words, you need to win the debt game. But how to play the debt game wisely?
Let’s put an end to the sleepless and exhausting nights filled with full of debt thoughts. Of course, it is never easy, but it is possible. All you need to do is to tackle the unopened doors to find the way out.
Powerful Methods To Clear Credit Card Debt
Debt Snowball
The debt snowball method by Dave Ramsey is a proven method to clear debts. Dave Ramsey designed the money management plan to achieve financial freedom.
The idea behind the snowball method is to pay the minimum debt first.
Say you have four upcoming debts to pay off with the amount due of $100, $300, $500, and $1000. You pay the lowest debt, $100 first.
Are you wondering how it works?
Well, it is just that you pay a minimum first and slowly increase the amount. It pushes you to pay more while feeling motivated and assured to do it.
This is a small win technique for those who are clueless to pay multiple debts.
You can automate this process by Signing up for Digit.
Digit automatically saves money from your checking account every day based on your spending habits & income, then transfers the saved amount to your credit card, once a month.
This helps you pay off your credit card debt faster without changing your spending habits.
Debt Avalanche
The debt avalanche is implemented by paying off the debts with the highest interest rate first.
Say you have two debts, for example, $5000 with 20% interest and $8000 with 12% interest. So you pay $5000 debt first because it has a higher interest rate.
Paying the expensive debts first to reduce the burden is the idea behind the debt avalanche. It minimizes the interest you will have to pay in the long run.
You can also try to lower the APR by singing up for Trim.
Trim is a personal assistant that helps you negotiate with your bank or credit card provider to lower interest rates and waive off unfair bank fees.
Trim also helps you automate your savings & negotiate your cable, internet & phone bills.
Sign up for Trim and reduce your credit card interest rates (APR)
Personal Loan
A personal loan can reduce the overload. Personal loans comparatively have a lesser interest than credit cards. So clearing the credit debt using a personal loan is a good strategy.
For instance, consider you have a debt of $300 with 20% interest, and you take a personal loan with 10% interest, then the personal loan has a lesser rate, which is an advantage for you.
So paying off the loan in installments can help you cut off on high-interest rates and boost your credit.
Balance Transfers
This balance transfer method is used to save up by transferring high-interest credit card debt to another card with a low-interest rate.
But remember that, if you use this strategy multiple times and maintain a high debt level, the credit score may decrease making it hard to get more money.
Depending on your credit limit, your issuer may issue more or less transfer limits. This method is suitable for those who need time to pay off the debts.
Balance transfer cards usually have 0% APR for a certain period of time, between 12 – 18 months. After this period the interest rate rises but it will be lower than your previous credit card.
Check out the best Balance Transfer Credit Card with low-interest rates.
Debt Settlement
A lump sum is negotiated with creditors to reduce the overall debt to close the debt. For example, if you have borrowed $15,000, then you negotiate and pay $7,500.
It is crazy, right? but wait, why do you think the lender accepts the offer?
It is because you make a one-time payment with a huge amount rather than paying little amounts for a long time. The debt is usually settled between 50-70% reduction.
Earn Cashback
Earn cash back for your purchases with a credit card. Apply for Chase Freedom Unlimited® Credit Card and earn up to 5% cash back on groceries, travel, & all other purchases.
Moreover, you can also earn extra cashback from 2500+ online stores. Sign up for Rakuten and earn cashback whenever you shop online and instore.
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Tips To Deal With Debt
Clearing credit card debts seems easy before you get the money, but when paying, you will have unexpected struggles.
Some easy money-saving tips just stay in our minds, but we don’t actually do it. Yes! When it comes to money, we have several ways to spend it but very fewer ways to save it. most of us would have saved a lot of money if money handling was easy.
Have you thought why paying debt is not as easy as it seems? Like you, many others find it very difficult to deal with money matters. One mistake we all do is ignoring simple things we could actually do to save money.
Here are some tips to deal with debt:
- Learn money skills
- Keep a note of all the money dealings
- Don’t make investments that may bring loss
- Double your investments with assured ways
- Settle the highest debt if you have many debts
- Consider on doing freelance works
- Drop lavish expenses
- Organize your repayment plan
- Maintain income and expenditure sheets
- Read books on money techniques
- Sell something you don’t use
- Start a side hustle
Cheer Up! You Can Pay It Off!
Running behind earning money and having hardships paying off the credit debt is what puts us down.
But If others have come out of the debt burden, then you can too. Put an end to unwanted expenditures and learn to make more money by starting a side hustle.
Miracles may happen when you change your strategies and lifestyle. Do some math and manage your finances. Work on creating a budget and execute it to defeat your debts.
Opt for these services and let the experts negotiate your APRs and reduce your monthly bills to save more money and clear off debts faster.
- Trim (Negotiate Credit Card Debt)
- Billshark (Negotiate Cable, Phone & Internet Bills)
- Digit (Automate Credit card debt pay off)
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