If you have credit card debt, you’re not the only one. Actually, a study shows that 55% of Americans are carrying a credit card balance from month to month. Don’t worry, as paying off credit card debt can happen faster than you think. The solution is to create a plan and follow it through. You can choose any of the methods below:
The Snowball Strategy
This strategy is recommended for all kinds of debt, from smaller to larger amounts. Getting rid of debt in the shortest time period possible is a goal that keeps you motivated.
The essence of the “snowball” method has 2 steps. Firstly, your focus will be to pay the minimum amount for each debt you have. Concentrate to pay the smallest debt in full. Continue in this manner until you got rid of all debts on your list.
Recommended to: People who enjoy celebrating any small achievement
The Avalanche Strategy
The Avalanche Strategy is recommended by J. Dennis Mancias, a former financial advisor at Symmetry Financial Solutions in San Antonio.
List all your debts from the highest interest rate to the lowest this time. Similar to the previous method, make the minimum payment on each and choose to add more to the highest interest debt you have.
For example, if you have a monthly budget of $500 to pay off your credit card debt, pay the minimum amount for each, then direct the rest to your highest amount. After you pay in full that debt, go to the next highest rate and continue in this manner until you are free of any debt. “Once one card is paid off, you don’t eliminate that payment, but instead roll it over to the next card to accelerate the payoff”, Mancias indicates.
In order to save money with this method, it’s very important to stick with it until the end.
Recommended to: people interested in interest savings
Learn to Grow Your Business Through Debt
Priya Malani, the Stash Wealth CEO and financial expert explains that you can view debt as a way of supporting the growth of your business.
“When you’re dealing with debt, you’re dealing with somebody else’s money that you’ve borrowed to use to invest in your business with the end goal of obviously growing, scaling, and increasing those profits”, Malani adds.
A few other of her tricks refer to negotiating more favorable terms or prioritizing principal payments over interest payments.
Recommended to: people who own a business and wish to grow it
Switch to Cash
Steve Repak, the author of “6 Week Money Challenge” talks about another great way to pay off credit card debt. The trick is to stop using credit cards. “It seems like a no-brainer, but sometimes it is easier said than done,” Repak agrees.
Using cash to pay for groceries and other purchases can also help you spend less generally. It will help you plan your money at the beginning of the month and stick to your budget. You can learn a few easy tricks about budgeting from our How to Save When the Money is Tight article.
Recommended to: People who want to be in control of their budget
How to Choose Where to Get Loans
On the other hand, if you are thinking of borrowing money but haven’t made a credit yet, it’s essential to choose a loan that will help you get the lowest rates. You might want to check: This Website Helps You Get a Fantastic Loan, Personalized on Your Needs