Do you find it hard to pay off your credit card debt? You have been making monthly payments on your these cards, but the balances seem to remain high. These carry-over balances incur interest from month to month, adding to the existing total balance. The monthly payments you make to your credit cards do not seem to clear the debt off. What you should do if you want to get rid of debt as soon as possible?
There is one strategy that works to help you get rid of credit card debt fast. But before explaining the strategy, let's see the common scenario of most people get into debt.
Typically, you will encounter the problem above if you do not make a full payment on your credit card upon receive monthly statement. In fact, if you like other cardholders who tend to make only the minimum payment required in the card agreement, you may face a debt problem like many of them. In fact, Most people get into a debt problem mainly because they often cashless purchases, but just make the minimum payment, the balances incur interest and be carry-over to the next month. The process repeated until the balances reach to the level beyond their financial capability to settle them.
Although the best way to be debt free is to settle in full for the credit card debt, but if you have hardships to pay it off, then the strategy below can be the alternative way to get rid of debt fast:
1. Stop using credit card
The immediate action that you need to take if you want to restore your finance back to a manageable level is: stop using the credit card. There is no way to settle it if you keep adding more to the existing balance.
2. Find the best loan for consolidation
One way to settle the credit card debts that normally carry high interest rate is by clearing it off with a low interest rate consolidation loan. There are many low interest rate consolidation loans available in the market, but you need to get a loan with amount just sufficient to pay off your credit card debt, not apply more for cash out purpose. Although the interest rate is dependent on your credit rating, try to get a loan that has as low interest rate as possible and as short repayment term as possible. The interest rate of the consolidation needs to be lower than the current interest rates in order to take advantage of consolidating of debt.
3. How to be debt free fast
Here are the tricks to pay off the credit card debt as quickly as possible. First, the monthly repayment will be reduced after the consolidation with a loan at a lower interest rate, you could pay off the loan faster if you make the same amount of monthly payments used to pay your debt before the consolidation towards your loan. For example, you are paying a total of $ 1000 on your credit card payments, and after consolidation, the monthly repayment for loan is $ 600. If you continue to make $ 1000, instead of $ 600, you will be able to clear the loan much faster than if you stick to the repayment plan at $ 600 / month.
Many people will stick to the repayment plan of the consolidation loan. If you can make the same monthly payment as before the consolidation, you will be able to cut short the repayment period and get rid of credit card debt fast.