When you got your first credit card, you were probably bright-eyed, bushy-tailed, and excited about all the rewards spending with it could bring you. Now you’re a couple hundred, maybe even thousands of dollars, in the hole and are struggling to pay off your debt.
Yeah, credit card debt is easy to fall into, but it can take years to crawl out of, especially if you don’t have a plan of attack for paying it off. If you don’t want to have credit card debt hanging over you for years on end, you need to come up with a plan, and fast.
That’s where we come in. To save you some time, we’ve come up with a list of tips for helping you pay down your credit card debt faster, so you can enjoy financial freedom sooner. So let’s get to it.
1. Do A Deep Dive Into Your Debt
The first step in creating a debt pay off plan? Knowing exactly how much debt you owe. This may sound simple enough, but you’d be surprised how many people actually owe more than they thought they did, especially where credit card debt is concerned. According to a 2015 study by New York Fed researchers, American households estimated they owed 40% less in credit card debt than what their lenders had on record*. That’s a lot!
But there’s good news. Tracking your debt is easy with the free app Credit Karma.
You can get free credit reports that will show exactly how much debt you owe to what lenders, and how it’s affecting your credit score too. Credit Karma will also alert you whenever there are important changes to your credit report.
As you do work to pay off your debt, tracking your progress will be key in terms of figuring out whether the methods you’re using are effective or if something needs to change.Sign up for Credit Karma today in three easy steps, so you can start formulating your debt pay off plan.
2. Consider Refinancing Your Debt -- It Can Save You A Ton In Interest
Everyone with credit card debt knows that the worst part about it isn’t the debt itself, it’s the high-interest rates your credit card company charges each day your balance goes unpaid. You could spend years making payments while barely touching the principal as your interest collects interest, and your balance grows and grows.
While your credit card company is more than happy to keep you in this cycle of debt, Credible wants to help you pay it down faster by helping you save on interest with debt refinancing.
Here’s how Credible works: Credible matches people with low-interest personal loans that can then be used to pay off their high-interest credit card debt.
Why do this? For that lower interest rate for one, which will help you save hundreds or even thousands of dollars over time (and could even shave a few years off the life of your debt). And if you have debt spread across multiple cards, instead of trying to keep track of multiple monthly payments, you’ll just have one, which will make planning your budget around your payments so much easier.
Credible offers loans ranging between $1,000 and $100,000, with rates starting at 4.99% — much lower than pretty much any credit card available. People with a credit score of 660 or above get the best rates.If you want to see how much credit card refinancing could save you, check out Credible today.
3. Get Help From This Company To Pay Down Your Highest Interest Balances (This Is Best For Credit Scores 660 And Higher)
Another great option for managing multiple high-interest credit card balances is Tally. This credit card debt consolidation app helps you manage your credit cards more efficiently by working to help you pay down your higher interest balances first.
Using Tally is easy:
- Add your cards to the app and it will analyze balances, payments and interest rates and then run a credit check (using a soft pull, so it won’t impact your score) to see if you qualify for its line of credit.
- If you do qualify, accept Tally’s low-interest line of credit offer.
- Tally monitors your balances, APRs and due dates for your registered cards and makes payments on them for you from the line of credit you opened.
- Pay Tally back each month for the payments it makes on your behalf, at your lower interest rate until your debt is paid off.
Tally members save an average of $5,300 over the lifetime of their credit card debt. Another huge plus? Tally is 100% fee-free — you’ll never be charged an annual, origination, prepayment, balance transfer, late or over-limit fee, ultimately adding to your savings.
Tally offers variable APRs for its lines of credit starting as low as 7.9% and a FICO score of 660 is typically required for a line of credit approval. Stop juggling multiple payments for your credit card debt.Use Tally to consolidate them into one monthly payment, at a lower rate, and pay your debt down faster.
4. Curb Your Monthly Spending Immediately
When it comes to paying down debt fast, cutting back on frivolous spending is a must. So as much as you don’t want to give up those weekly takeout orders or that Hulu subscription, cutting back on things like that will seriously help speed your debt pay off along by leaving you with more money to go towards extra payments. Truebill is super helpful when it comes to this.
When you link your bank account to the app, it will give you an instant summary of all your subscriptions, recurring bills and frequent charges (so you don’t have to spend hours sorting through your bank statements yourself). If you see any subscriptions you don’t want or need anymore, cancel them directly through Truebill with the click of a button.
For your frequent charges that aren’t bills, use Truebill to help you curb your spending. The app lets you group similar charges under category names of your choice and set budgets for each category. Truebill will track your spending, and tell you how much per day you can spend in any category for the month to meet your various money goals.
With Truebill’s help, you’ll be spending less and saving more instantly. Then you can take those savings and put it directly towards your debt.
5. Paying Monthly Minimums Won’t Cut It -- But There Is Something That Can Help
If you really want to make some serious headway on your credit card debt, making extra monthly payments is the way to go, and the app Digit can help you save for these extra payments effortlessly.
How it works:
- Download the app and create a credit card debt goal
- Enable the Digit Pay feature
- Connect your bank account to the app
- Digit will analyze your spending and income patterns so it can figure out exactly how much you can afford to save every day
- It will automatically transfer that money over to your Digit account to make a monthly payment directly to your credit card company every month from those savings on the date you set
And just like that, making extra monthly payments on your debt without having to worry about it, is a lot easier. Digit does the hard work for you. You’ll be amazed just how much faster you’ll be able to pay down your debt when use Digit to make it a priority.Try Digit for free for 30 days so you can challenge yourself to this.
6. Get A Side Hustle To Up Your Monthly Income
Your credit card debt payments can eat up a good amount of your monthly budget. That’s why we recommend finding a side hustle to up your monthly income and supplement your monthly debt payments. One option that we can recommend right now is DoorDash. It’s easy-going, has steady pay and schedule flexibility.
DoorDash is an on-demand delivery service that contracts people to deliver food orders. Deliver food as a “Dasher” via car, bike, scooter or motorcycle, make your own schedule and earn anywhere between $10 and $25 an hour (depending on where you live). You’ll get your money direct deposited into your bank account every week and can track your earnings through the app. It’s that simple.
7. Pick One Of These Tried-And-True Debt Pay Off Methods To Help You Along The Way
We’ve said it before, and we’ll say it again, coming up with a plan to pay down your debt is an essential part to being successful. Two of the most effective are the debt snowball and debt avalanche methods.
With the snowball method, you work to pay off your debts from smallest to lowest. And with debt avalanche, you work to pay off your debts with the higher interest rates to the lower interest rates. Both have their benefits. The debt snowball method focuses on shrinking your monthly payments quickly over time, while debt avalanche focuses on shrinking the interest you end up collecting. Either way, adding one of these tried and true methods is a good idea to getting on the right track.