Advertising
Advertising

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.

Advertising

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.

Advertising

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.

Advertising

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.

Advertising

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

More by this author

Adnan Manzoor

Data Analyst & Life Coach

50 Free Online Resources for Self-Motivated Learners How to Relieve A Toothache When A Dentist Isn’t Nearby? Say Goodbye to Sleepless Nights! 10 Essential Oils That Help You Sleep Soundly. Are You Obsessed with Your Sneakers? They Can Be The Cause of Smelly Feet 5 Simple Tips to Reduce Stress and Stop Anxiety Quickly

Trending in Money

1 How to Use Credit Cards While Staying Out of Debt 2 How to Use Debt Snowball to Get out from a Financial Avalanche 3 How Personal Finance Software Helps You Get More Out of Your Money 4 The Best Ways to Save Money Even Impulsive Spenders Can Get Behind 5 How to Answer the Tough Question: What are Your Salary Requirements?

Read Next

Advertising
Advertising
Advertising

Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

Advertising

Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

Advertising

I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

Advertising

Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

Advertising

So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

Read Next