Contributed
Credit card debt in America hit a record high in 2018, with the average American. The average American has a credit card balance of $6,375, up nearly 3 percent from last year, according to Experian. If you have substantial credit card debt, make 2019 the year you pay off your credit card bills with these tips
Pay off your lowest balance first
If you have multiple credit cards, one strategy you can employ to start paying off debt is paying off your lowest balance first. There are many reasons why this is a great strategy, the biggest one being that seeing progress early on helps keep you motivated to pay off other debts. Paying off your lowest balance is a “small wins” strategy that grants you that feeling off success early on. This strategy works well is there’s a drastic difference between balances on your credit cards, and there’s one outstanding balance that’s significantly lower than the others. If this is not the case, then you will probably want to use the next strategy.
Pay off your balance with the highest interest rate
Another strategy for paying off credit card debt and learning how to repair credit is paying off whichever balance that has the highest interest rate first. This is a sound strategy because your bill with the highest interest rate is going to continue to increase your overall outstanding debt – even if you don’t charge anymore payments to the credit card, this bill will continue to increase due to the interest rate. Get a handle on this type of bill by focusing on it first, before paying off any other debts. This will help “stop the bleeding” more quickly.
Take out a consolidation loan
If you have a large number of credit card bills and feel overwhelmed with payments, late fees, and other maintenance worries, then it may be in you best interests to take out a consolidation loan. A consolidation loan is a type of loan that essentially combines several loans or outstanding debts into one, which makes it easier for you to pay off and keep track out payments. Consolidation loans can also help significantly with interest rates. For example, if you have multiple credit card balances with varying interest rates, a consolidation loan help combine all those balances into one singular one with a fixed interest rate that will likely be more favorable to you.
If you have a friend or family member who is willing to help you out, a more personal credit card repayment option is to task a close friend for money to pay off the lump sum of a credit card debt. This will stop interest from accruing, and instead of paying off that interest, you can pay back your friend in a similar way without worrying about fees.
Credit card debt can seem overwhelming, but with the right payback strategy and knowledge, it doesn’t have to be. In reality, credit card debt is something that nearly everyone has to deal with, so don’t feel like you are alone in your struggle.
