Credit cards can be a great fallback if you’re temporarily running short on funds. Some even come with cash back or other rewards. However, if you don’t promptly pay off credit card debt, it can grow over time and rapidly become unmanageable. Are you unsure of how to start lowering your debt most effectively? Check out these smart strategies for paying off multiple credit cards quickly.
The sooner you start paying down credit card debt — even if you can pay only a small amount at a time — the less likely it is to spiral out of control.
1. Consolidate Your Debt
If you have at least fair credit, a debt consolidation loan is a great way to accelerate your debt payoff plan and eliminate your credit card debt even faster. When you consolidate debt, you take out a loan. Usually, it’s a loan specifically for debt consolidation, but in some instances, a personal loan may work as well.
Once you receive the funds from the loan provider, you use them to pay off your credit cards. Now, instead of having multiple credit card payments per month, you have a single payment to the loan provider.
It’s critically important to ensure that the interest rate on the consolidation loan is lower than that of all credit cards. The convenience of a single payment is part of the draw of consolidation loans, but the main point is that the interest rate is drastically reduced, enabling you to pay off the debt much faster.
Keep in mind that if you’re having trouble repaying debt, you still have options. If your debt is getting overwhelming, you might consider bankruptcy.
2. Use the Snowball Method
Build Momentum from the Start
The snowball method of paying off debt has become popular in recent years — and for good reason. It’s easy to understand, and because you can start paying off cards faster, it’s great for staying motivated. Here’s how it works:
- Pay the minimum payment on each card every month.
- Put any extra money you can toward the card with the smallest balance.
- Once that card is paid off, move on to the card with the second-smallest balance.
This method gets its name because each time you pay off a card, you can roll its minimum payment into the next card. Like a snowball that grows larger as it rolls down a hill, the snowball method helps you gain momentum (and a sense of accomplishment) as you work toward eliminating your debt.
3. Use the Roll-Down or Avalanche Method
With the roll-down or avalanche method, you focus on the debt with the highest interest rate first. Each month, you pay the minimum payment on all cards and then allocate any extra you have to the card with the highest interest rate.
Once the card with the highest interest rate has been paid off, you start focusing all extra money on the card with the next-highest rate. Because it prioritizes cards based on interest rate and not total balance, this method will lead to you paying less money over time (with all things being equal) than the snowball method.
Do you have debt you don’t think you can pay off? Call Fesenmyer Law Office today at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati).
4. Pay More Than the Minimum on All Accounts
Even if you don’t have much money to put toward your credit card debt, paying more than the minimum is always better than not. The more you can chip away at existing balances, the less interest the debt will continue to gain. Even something as small as an extra $10 per month can make a big difference over time.
5. Take a Look at Balance Transfer Cards
Do you think you could pay off your existing debt if you had just a little more time? If so, a balance transfer credit card might be the answer. When you open a balance transfer card, you have a chance to transfer the balance from an existing card (and sometimes from more than one) to a new card for a 0% introductory rate. That rate usually lasts for several months, but some cards offer 0% APR for a year or more.
This can be an excellent way to avoid interest while you finish paying off credit card debt, but there’s a catch: If you don’t pay the balance off before the introductory APR ends, you may be stuck in the same or similar circumstances. Some cards charge deferred interest, meaning that if you don’t pay the balance in time, you’ll be hit with all of the interest that accrued over the promotional period.
6. Look Closely at Your Budget
Paying extra toward your credit cards can really help you move toward financial freedom, and one of the best ways to pay extra on your cards is to free up money somewhere else. If money is already tight, you may not be able to free up much, but even a little makes a difference. Here are a few ways to find more money to possibly pay toward your credit cards:
- Cut subscriptions you don’t need.
- Limit the amount of dining out you do.
- Sell any items you no longer need or want.
- Pick up a side hustle (like delivery, rideshare driving, or online freelance work).
If you don’t have a formal budget, now is the time to make one. Budgeting helps you see where you can cut more and how you can make better use of the money you have.
Trouble With Debt?
Let Us Help You Build a Stronger Financial Foundation
The right plan can make a major difference when it comes to paying off credit cards. However, depending on your financial situation, you might discover that no matter how hard you try, you can’t get out of debt.
If this is the case, it may be time to consider bankruptcy. Under the right circumstances Bankruptcy can be a stepping stone to a better financial future. Fesenmyer Law Office has helped thousands of people in your situation find a new start, and we might be able to help you, too.
If debt is getting in the way of your future, call Fesenmyer Law Office today at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati).
