How To Crush Credit Card Debt

How To Crush Credit Card Debt

Credit card debt is no small matter. With the average household owing over $7,000 in plastic expenses, credit card debt rivals student debt as the financial burden that causes Americans the most hardship, and between minimum payments and skyrocketing interest rates, it can sometimes feel impossible to escape.

Credit card debt doesn’t have to determine your financial future, though. There’s no easy way out, but there are plenty of ways to take down your debt faster and for good. If you’re really looking to break free from credit card debt, here’s how you can absolutely crush it.

Stop Charging

It may seem obvious, but given that the credit card debt rate only seems to be climbing, it’s something that needs to be said. The only way you’re going to get rid of your credit card debt is if you stop accumulating it.

While you’re working on repaying, simply lower interest rate. Just give your credit card company a call and ask.

You’ll probably have to negotiate your rate down, but there are a few simple things you can do to make your point to your card company. Be prepared in advance to:

  1. Talk about good payment history
  2. Show that they’ll still make money on you even with reduced interest
  3. Be steadfast in demonstrating your commitment to getting rid of debt
  4. Talk about a balance transfer to a different card company with lower interest rates
  5. Be prepared to walk away

You need to be prepared to show that you’ve thought of alternatives such as switching cards. You might not get the lowest interest rate your card company offers, but a drop of even a few percentages can save you hundreds and help you get your debt cleared up that much faster.

Actually Transfer Your Balance

Let’s say you don’t get that improved interest rate, or even if you do, you still think you could do better somewhere else. Don’t be afraid to transfer.

Do the math, and if your card’s rates including interest and annual fees are holding you back from your debt-free goal, get rid of them. Transfer your balance to a card with no annual fees and lower monthly rates.

Balance transfers usually carry a onetime fee with them, but they will generally be far less in dollar amount than what you’d be paying in interest staying with a less than great credit card. In fact, a rate cut from 20% to 15% on a $5,000 could net over $300 a year in savings – money that can be rolled back into your card payments to help get things paid down faster.

Prioritize Your Cards

The average credit card user has at least 3 cards, which means that you’re probably worried about paying off more than one card. It can actually hurt you to focus on more than one card at a time, though, so prioritizing your debt is an important step.

Start with your card that has the lowest balance – that’s the one you’ll be able to pay off the soonest. Pay the minimum balance on your other cards while you focus the bulk of your financial resources on paying that first balance down.

Once that first balance has been paid off completely, take the money you were paying for that first card and add it to the minimum payment you’re paying on the next card. That way, you’re not taking more out of your account than you have already allocated for credit card debt, but you’re getting each card paid off sooner by paying more than the minimum. Keep going until all your cards have been paid off.

Increase Your Income

If you’re really looking to crush your credit card debt, paying what you’ve been paying isn’t going to get you to your goal. You’re going to need a real influx of cash to help take care of that debt, which is why you might want to think about how to increase your income.

Small side gigs like freelance writing or design, handyman work, or even pet, house, or babysitting can put some extra cash in your hand that you can turn into a bump in your credit card payments. Negotiating your current salary is another option, especially if you’re searching for a new job, or you’re looking at a potential promotion.

Rolling your increased income directly into your credit card payments can help ensure that you’re paying more than the minimum on your priority card, which means that in the end you’ll get it paid off faster, with more ease, and with greater savings to yourself.

There isn’t a one-day solution for credit card debt. It will take time and planning to get it paid off. With just a bit of dedication, though, it’s possible to pay down your debt fast and completely crush your credit card debt.