Make a Plan to Eliminate Credit Card Debt
If you are able to pay off your credit card balance(s) in full each month than bravo you're all set.
However, if you are living with ongoing credit card debt and you are unable to pay off your monthly statement in full it's time to face the numbers. Outstanding credit card debt is particularly difficult to manage because the interest rates are so high. Often what starts out as a modest sum spirals out into an unmanageable balance because of high interest rates. We can get into credit card for many reasons; the important thing is not to shame spiral but instead to recognize your options, face your fears, and come up with a plan. Take a deep breath. Start where you are.
Begin by listing out:
Each credit card
The associated interest rate(s), and
The remaining balance(s) owed.
Writing down all your debt and interest rates helps you understand your holistic picture and better prioritize paying off high-interest debt.
Now that you have your debt written out, consider these two key methods for debt payoff.
• The avalanche strategy pays off the loan with the highest interest rate first while you continue to make minimum payments on your other debt. This is a good approach if you want to pay off your highest interest debt as quickly as possible.
• The snowball method focuses on paying off the smallest debt first while making minimum payments on your other debt. This is a good strategy if you respond well to small victories.
Mindset matters here, so pick a method that feels best suited for your psychological preference.
Now, run the numbers. Use the free online debt repayment calculator here to get a sense of how long it will be before you can pay off your debt in full.
Pro-Tip: Be sure to check out alternative options such as zero-balance debt transfers and personal loans to see if they may be available to help you pay off your credit card debt faster and at a lower interest rate.
Let me know how it goes. You've got this!
