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5 Tips to Pay off your Credit Card Loan Quickly and Easily

5 Tips to Pay off your Credit Card Loan Quickly and Easily

It is not easy to pay off debts. It is possible that the debt is too big and you are out of options but the important thing is that you do not need to lose hope because if you keep looking. There are always options which will help in relieving the burden of the debt. You have to look for better options if you feel that the debt is going out of control. While looking for options the main thing that should be on your mind is how to reduce the burden and make the paybacks manageable.

Here are some tips that will help in paying off the credit card debt quickly and easily.

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1. Know where you Stand

The first and foremost thing you need to understand is your financial position. If you have more than one credit card with balance then you need to know the name of each card and their interest rates. It will help in knowing how much you can set aside for repaying the debt. It is better to make a list of income and expenses. If the expenses are exceeding income then you need to improve the flow of cash.

2. Negotiating the Interest Rate

You will find it easier to get rid of the debt if you are able to negotiate for a lower interest rate. If the interest rate is high then you will find it difficult to keep up with the monthly burden of the debt. Having lower interest rate can offer huge relief. Lower interest rates mean that the monthly payments will be small so you can easily pay them without putting too much stress on the budget. If you want to get relief by lowering the interest rates then you need to have a good credit score.

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3. Considering the Option of Personal Loan

If the debt is too large then paying it off with a personal loan is an excellent option. The personal loans have a lower interest rate as compared to the credit cards. With low-interest rates, you are able to save more cash and use it to pay the principal balance. It will not just allow you to pay your debt faster but will also help in saving money in the process. You can negotiate with the personal loan lenders about the interest rate and the size of installments.

4. Two effective Strategies in Paying off the Debt Faster

Debt snowball and debt avalanche are two strategies that are hugely helpful in paying off your debts.

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The debt avalanche strategy focuses all the effort on the credit cards which have the highest interest rates. In this strategy, you should pay the minimum on all the credit card balances. The extra funds that are left after making your payments should be dedicated to the one which has the highest interest rate. Once you have manages to pay off the debt of the card which has the highest interest rate, move on to the next one with high rates. It is an excellent method for paying off debt while saving some money.

The debt snowball strategy is opposite and the focus is on the cards with the lowest balance. In this strategy, you pay off the smallest debts first and work upwards from there. When you manage to pay the small debts, it will lift your spirits and keep you motivated as you will know that paying off debt is not impossible.

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5. Look for a balance transfer:

If you are unable to negotiate for the lower interest you can consider transferring the balance. Transferring the balance means that you can take debts of high-interest cards and move them to a different card which has a lower interest rate. It will also give you the benefit of making just one payment in a month. You can get a reduction in the monthly payment if you have a good credit card score. Reading the contract carefully is also important because there are some credit cards which have high transfer fees.

All of these methods are a good option for getting rid of the credit card debt quickly. To make sure that you have chosen the perfect strategy, you need to consider your financial situation thoroughly. You do not always have to settle for just one strategy. You can also use a combination of two methods to make things easier.

Featured photo credit: Credit Sesame via creditsesame.com

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Adnan Manzoor

Data Analyst & Life Coach

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Published on September 17, 2018

How Being Smart With Your Money Leads to Financial Success

How Being Smart With Your Money Leads to Financial Success

Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

1. Avoid being “penny wise but pound foolish”

It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

2. When you want something big, wait

Impulsivity can get you in trouble in most aspects of life. Finances are no different.

It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

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So, you get the itch.

You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

Here’s where you have to take a step back.

Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

The impulse faded. And you just saved yourself a ton of money.

3. Live smaller than you can afford

You finally get that big raise. And you want to celebrate – and why not?

You’ve been looking forward to this forever. And after all, it was all due to your hard work.

That’s fine, splurge a little. However, make it a one-time deal and be done.

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Don’t get caught in the trap that just because you’re now making more money, you should spend more.

Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

4. Practice smart grocery shopping

Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

Create a grocery budget

Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

Make a list… and never deviate

Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

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You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

These impulse decisions will lead to overspending, which will derail your grocery budget.

Eat before going grocery shopping

It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

This makes it much easier to stick to your grocery plan.

5. Cancel your gym membership

Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

The average gym membership costs around $60 per month. That’s $720 a year.

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Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

It’s baby steps… And baby steps can start now!

I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

Featured photo credit: Unsplash via unsplash.com

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