Credit card debt is a financial disaster as it can quickly spiral out of control due to high interest rates. But sometimes it’s hard to avoid debt. This was especially true for many Americans during the coronavirus pandemic, as unemployment, economic uncertainty, and layoffs caused widespread financial hardship. If you’re stuck with credit card debt for whatever reason, follow these tips to help you pay it off faster.
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stop using the card
If you continue to use your credit card, it will be difficult to pay off the debt. For those in the midst of a financial crisis, this may be difficult to avoid, but if you’re just spending money on your cards on a regular basis, you may not be able to get out of debt. If you’re serious about paying off your debt, switch to using cash, or at least use only what you can afford to pay off each month.
increase payment
Paying back the amount you paid on your credit card is not enough to get you out of debt. If you want to reduce your debt even a little, you need to increase the amount you pay. This can also be difficult to do if you’re struggling financially, but consider where you can cut back on your budget to spend as much as possible on your credit card debt. Just adding more can help reduce your long-term credit card debt.
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Take advantage of our 0% balance transfer offer
If you can’t pay off your debt quickly, you can at least buy yourself some time with a 0% balance transfer. These types of balance transfer offers are typically valid for one year, and sometimes up to 18 months. If you’re temporarily behind on your debt payments but anticipate better times ahead, this might be exactly the kind of respite you need. Most balance transfer offers are 0% Although we advertise a rate of , please be aware that we also charge a 3% to 5% fee when migrating.
Integrate into low-cost loans
The number one rule in paying off credit card debt is to stop the bleeding as soon as possible. In addition to giving up credit cards, transferring balances to low-interest loans can also help temporarily. Interest on the debt will continue to accrue, but you can slow down the compounding effect by lowering the interest rate. For example, if you have $10,000 in credit card debt at 18% and consolidate it into a 6% personal loan, you can save $1,200 in interest expense annually.
negotiate with creditors
Most people simply accept the interest rate set by their credit card company. However, you may be surprised to learn that you may be able to negotiate a lower rate. It’s never a bad thing to ask questions, although it doesn’t always work. If you’re a long-term customer with a solid payment history, your odds can be higher.
In the worst-case scenario of not being able to pay your card, you may be able to reach some sort of negotiated settlement with your creditors. While this hurts your credit score, it may be a way to reduce your overall debt and develop a reasonable long-term payment plan.
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This article originally appeared on GOBankingRates.com: 5 ways to significantly reduce your credit card debt by the end of the year