Three Steps to Pay Off Credit Card Debt
1. Pay More Than the Monthly Minimum
If you only pay your minimum credit card balance each month, you're not alone. Thousands of people across the nation are in serious credit card debt. One of the main reasons why they are is because they're doing the same thing you're doing — only paying the minimum amount required. When you only pay the minimum, you're not paying down your debt at all. You're merely paying a portion of the interest that you're accruing. This is not how you pay off credit card debt.
2. Worry About Your Balance and Interest
If you stop using your credit cards completely and only pay the minimum amount each month, it would still take you years and years to pay off even the slightest balance. Why? Because even though you're not making new charges on your credit card, you still have a balance; and that balance is building interest which is increasing the amount you owe. So if you're only paying $40 a month towards your credit card debt, you're barely making a dent in your balance, the interest continues to increase, and the amount you owe is barely affected. That's why paying the minimum amount each month is not a practical way to pay off credit card debt. If you really want to tackle your credit cards, you need to stop charging your expenses and establish a household budget to pay off your credit card debt.
3. Pay Off Multiple Credit Cards Simultaneously
Most people have more than one credit card. As a result, most people with credit card debt problems have it across multiple cards. This definitely makes paying off credit card debt more difficult. However it's not impossible to do. When you have multiple credit cards with varying levels of debt, you want to tackle the card with the least amount of debt first. This will be the easiest to pay off. Another option is to start off by attacking the credit card debt that charges you the most interest.
However, if you have thousands of dollars on all your cards, you might need to consolidate your credit card debt with a debt consolidation loan or by taking advantage of other debt consolidation services. If creditors are hounding you and your accounts have gone into collections, you definitely need to get credit counseling to see what options are best for you to pay off credit card debt.
If you want to pay off credit card debt you need to first assess your situation and decide if you can eliminate credit card debt on your own or if you need professional debt consolidation help. Then you can form the right plan to pay off those credit cards and get control of your finances.