With the average American owing more than $10,000 on credit cards, paying down credit card debt is a topic on a lot of people’s minds. It can often seem like an impossible task, but there are some steps that you can take to make paying down your debts a little easier. Take a look at these strategies for paying down credit card debt and come up with a plan that fits your needs and personality.
Where Do I Start?
The best approach for which cards to pay first depends on your personality. If you are the type that focuses on crunching numbers and on bottom lines, you should pay off credit cards with the highest interest rates first. This will save you more money overall. If you are more emotionally driven, it may be best to pay off the debts with the lowest balances first. The number of accounts remaining will dwindle more quickly, which will be encouraging.
Think About Balance Transfers
If you have high interest rates credit cards or loans, it might be best to transfer balances to cards with lower rates. This will save money on interest charges. You may also consider consolidating cards so that fewer payments are required each month. This only makes sense to do if you are also saving money on interest charges in the process.
Even if your debts are not completely paid off, make sure that you continue (or start) to put some money into a savings account each month. While it is
very important to pay off your debts, it is also important (and possibly more important) to save money for emergencies. Once you have fully paid down your debts, try not to re-accumulate them and end up in the same position that you started with. Use the money that you were previously paying towards credit cards as additional savings instead. You will then have funds to pay for larger purchases and can avoid carrying a balance on your credit cards.
Spend a Little on Yourself
It is difficult to save every penny you make without enjoying some of it. Furthermore, if you don’t spend a little on yourself, you might become resentful and feel like all you do is work to pay bills. Don’t splurge on lavish purchases. Instead, focus on small purchases. For example, take a mini-vacation or weekend getaway instead of a big vacation, or treat yourself to dinner and a movie. It is okay to give yourself a reward, but keep it within reason and avoid putting yourself into more debt.
Strategies for Paying Down Credit Card Debt
These strategies for paying down debt are meant to create a balance in your life. By creating a reasonable and feasible plan, you increase your chances for success. With the right approach, you can avoid feeling like it’s a daunting task but rather that you are making progress while still enjoying life.