If you have found yourself with thousands or tens of thousands of dollars of credit card debt, the sudden realization can be a disheartening one. As time goes on, you begin to feel trapped like a prisoner, barely keeping your head above water from month to month. The great news for anyone battling credit card debt is that there are numerous options through which you can begin to get your finances under control. These options will not only save yourself from undue stress but will also help you save money in the long run.
Up Your Minimum Payments
This may seem like a chore, but I’ve never met one person who couldn’t cut at least a few dollars more to the credit card companies each month. By doing this, you will eat into the interest faster and pay these cards down quicker than by doing nothing different. If your monthly minimum is $50 for a credit card, upping it to $100 will save you hundreds to thousands of dollars over the course of the debt. It’s not just about paying it off faster, but about paying it off for less as well.
Shift Debts to Other Credit Cards
If you currently have debt across multiple credit cards, you should be examining which cards have lower interest rates and which ones are higher. If your lower interest cards have available credit on them, shifting your higher-interest debts to the lower-interest credit card will help you avoid unnecessary interest and pay the debts down faster. Generally, there is a one-time charge for a balance transfer (2-3% of the balance), but it is worth it when moving debt from a credit card with 19% interest to one with 12% interest.
Use Savings to Pay It Off
While this is generally not a good idea, if you are up to your eyeballs in debt and cannot function month to month, cashing out your savings accounts to pay off credit card debt may be a better (or the best) option. You no longer will have your savings to rely on but you can zero out your credit card debt and avoid unnecessary interest that would otherwise continue to hound you for months and years to come. Paying off a debt at 15% interest is the same as earning 15% in an investment as you will be saving all that money that otherwise would be going to the credit card company in the form of interest month after month.