No one wants credit card debt looming over them as they try to progress through life. This type of debt has a way of stifling life plans such as buying a new home, planning a wedding, or even being able to afford a much needed vacation every once in a while. Credit card debt can be overwhelming and relentless, which is why it’s important to become debt free to live the life you deserve.
But where do you start? If you have a large amount of debt, it may seem like you’ll never find the light at the end of the tunnel. But with expert tips and tricks, you’ll be on your way to achieving credit debt payoff in no time. You just have to use credit card debt payoff strategies that work for you!
Create a Budget
While it can be tempting to bury your head in the sand instead of facing your debt problems head on, this is almost always likely to not pan out well in the long run. If you’re one of those people who cringe every time they check their bank account because you’re not sure how it will look, it’s time to create a budget you can stick to that allows you to make payments each month.
Print off your bank statements from the last three months and divide your spending into relevant categories. These could include groceries, bills, entertainment, etc. Take a long hard look at your spending and figure out ways you can cut back. Did you discover that you spend a shocking amount on take-out each month? Or maybe you realized you have 10 streaming service subscriptions that add up to be a large chunk of change.
Either way, it’s time to make cut backs in order to afford your monthly payment. If you feel disheartened because you have to make sacrifices it’s important to remember that this is temporary. Once your debt is paid off you’ll be able to return to your normal way of living – this time without a debt cloud hanging above your head!
Get a Side Hustle
Starting a side hustle is a great way to pay off outstanding debt. While it can be tough working multiple jobs, having a side hustle is an effective way to gain an additional income each month. Lots of people who start side hustles when trying to pay off debt end up keeping them even once their debt is paid off.
Having extra cash each month never hurt anybody! You can start a side hustle you’re passionate about such as content creation, updating furniture or even starting an Amazon business. If this sounds like too much work for you, you can also become a delivery driver for one of the many delivery apps or work a remote customer service job on the evenings or weekends. There are lots of options available for side hustles – you just have to find one that works for your schedule and needs.
Pay Off More Than The Minimum Balance
If you’re only making the minimum payment on each of your debts each month, it’s no secret that it will take you longer to become debt free than if you pay more. If you have debts with high interest rates, it can be smart to pay more than the minimum balance each month to really make a dent in your debt situation. Target debts with high interest rates first as these are the ones that tend to skyrocket without a clear action plan.
Cut Up Your Credit Cards
While this may seem obvious, sometimes getting rid of your credit cards completely can result in incredible results. It’s all too easy to put purchases on credit when we have multiple credit cards in our wallet. Resist the temptation and cut those bad boys up! While it may be difficult adjusting to a life with only a debit card, it will result in huge savings in the long run. Train yourself to only work with the money that you have in your account.
Pay Off Your Largest Debt First
When people pay off their largest debt first, this is known as the ‘debt avalanche’ strategy. The idea is to take on debts with the highest balances or interest rates, as these are the biggest money drainers that exist each month. This could end up saving you thousands of dollars in the long run! There’s no denying how great it feels having a large debt cleared.
Pay Off Smallest Debt First
This is another credit card debt payoff strategy. Those dealing with multiple debts pay the smallest debt off first, otherwise known as ‘the snowball method’. The idea is that people will feel a sense of achievement after paying off the first debt and will feel more energized and ready to take on the rest of their debts.
By starting small, you aren’t overwhelming yourself with a large debt owed towards student loans or a home. It’s a great starting place for people who feel like they’ll never be able to pay off any of their debts.
Consolidate Your Debt
If you have multiple types of debt with different payment dates and interest rates, debt consolidation could be for you. The idea is that all of your debt is consolidated into a single payment each month with a fixed single rate. You can wave goodbye to those pesky high interest rates bringing you down each month!
This ensures that all of your debt is being dealt with and allows you not to worry about remembering payment dates for various types of payments. Even better, there’s a strong chance that you’ll be able to secure a low interest rate when pursuing this strategy, making you pay less in the long run instead of being bogged down by high interest rates. You can learn more about debt consolidation here.
Try to Settle
If you’re dealing with a difficult debt collection agency who won’t stop badgering you about paying off certain debts, it could be wise to pursue a settlement. Debt collection agencies want you to pay off your debt in the full amount as quickly as possible. However, they also could be willing to work with you on settling for an amount less than what you owe.
This requires strong negotiation skills and may be easier with the help of a trusted professional. It doesn’t hurt to try! You never know what your debt collection agency may do if you negotiate your hand in a smart way. Remember to hold your cards tight to your chest – anything you say to a debt collector can and will be used against you in the long run!
Become Debt Free With a Plan
Living a life free from the burden of debt doesn’t have to be a pipe dream. If you follow these credit card debt payoff strategies, you could be on your way to paying off your looming debts and living a life of freedom. Sit down with your finances, find out where you can save and decide how you want to pursue paying off your debt. There are multiple strategies you can use that fit in with your lifestyle and needs, allowing you to become debt free in no time!