Paying off credit card debt is easier when you have a clear plan. Start by listing each card and its important details, such as the:
- Balance
- Annual percentage rate (APR)
- Minimum payment
From there, choose a payoff method, look for ways to reduce interest and decide whether seeking expert help might make sense.
How to Manage Multiple Credit Cards While Paying Off Debt
If you have one credit card, your payoff plan may be straightforward: Make the minimum payment, then put any extra money toward that balance.
If you have multiple cards, weighing the pros and cons of two popular debt-repayment strategies can help you decide where extra payments should go.
The Snowball Method
With the snowball method, you focus on paying off the card with the lowest balance first, while making only the minimum payments on the other cards.
Once you’ve paid off one card, put more money toward the card with the next-lowest balance.
This strategy is usually not as financially efficient as the second option — the avalanche method — and it won’t save you the most money.
However, you may find it to be an effective way to boost motivation because you get an early win and feel encouraged to keep going.
The Avalanche Method
With the avalanche method, you focus on the card with the highest interest rate first while making minimum payments on the others.
Depending on your balances and how much extra money you have each month, it might take longer to pay off the first card.
However, because this method targets the most expensive debt first, it can reduce the total interest you pay. That should save you more money overall compared to the snowball method.
How to Reduce or Avoid Credit Card Interest
If you pay the statement balance in full every month, you can usually avoid interest on purchases. It’s important to do this with each billing cycle.
Most credit cards only offer a grace period if you pay your statement balance in full each month. If you carry a balance, new purchases may begin accruing interest as soon as you make them.
If you’re already carrying a balance, you may not be able to avoid interest entirely while you pay down debt. However, the following options may help you reduce what you owe.
Ask About Hardship Programs
Some credit card companies offer hardship programs for cardholders struggling to make payments. Depending on the issuer and your situation, these programs may include:
- Reduced interest rates
- Fee waivers
- Smaller minimum payment requirements
Some issuers may offer forbearance, which can allow you to pause or reduce payments for a short time. Interest may continue to accrue during forbearance, so ask how the program works before agreeing to it.
On its own, forbearance may not help you get out of debt. However, it can give you temporary breathing room if you’re dealing with a short-term hardship.
Make More Than One Payment During the Month
Many credit card companies calculate interest daily based on your average daily balance.
So, if you make multiple payments during the month, you may be able to reduce that average balance and lower the amount of interest that accrues.
Find a Lower Interest Rate
If you qualify, a debt consolidation loan may offer a lower interest rate than the current rate on your credit cards.
These loans can combine multiple debts into one payment, but the total cost depends on the loan’s annual percentage rate (APR), fees, repayment term and whether you keep adding new credit card debt.
If you think you can repay the debt in a short time, a balance-transfer card with an intro APR of 0% may be another option. Here’s how balance transfers can help reduce credit card interest:
- You apply and are approved for a new card.
- You transfer your credit card balance to the new card.
- You pay down the debt during the promotional period.
- Because the transferred balance has a low or 0% intro APR during that window, more of your payment can go toward the balance instead of interest.
Many balance-transfer cards charge a one-time fee of 3% to 5% of the amount you transfer. In many cases, the fee may still be worth it if the interest savings are greater than the cost.
Check the fee, the promotional period, the regular APR after the promotion ends and whether new purchases accrue interest.
When to Get Help Paying Off Credit Card Debt
These tips for paying off credit card debt may get you on track. But if you still struggle to keep up with payments or your balances feel unmanageable, debt settlement can be worth exploring.
Debt settlement can help some people resolve eligible unsecured debts for less than the full amount owed. To see whether National Debt Relief may be able to help, you can apply online.
FAQ
What are practical tips to avoid credit card interest charges?
Paying your statement balance in full by the due date each billing cycle is the clearest way to avoid interest on purchases.
If you’re already carrying a balance, making multiple payments during the month may reduce the average daily balance and lower the interest that accrues.
Is a balance transfer a good idea to pay off debt?
It can be, especially if you can pay off the transferred balance before the promotional APR expires.
Before applying, compare the balance-transfer fee, the promotional period, the regular APR and any rules that apply to new purchases.
What is the quickest way to get out of credit card debt?
The fastest path depends on your balance, interest rates, income, expenses and credit profile.
In many cases, lowering your interest rate through a balance transfer or debt consolidation can help, but you’ll still need a payoff plan you can stick with.
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