There are two ways you can accelerate debt repayment to settle your outstanding balances in a shorter amount of time.

The Snowball option is a plan where you list all your debts and resolve them in order from the smallest to the largest balance. Once you pay off one credit card, you use those monthly funds to pay off the next creditor. The amount “snowballs” until all your outstanding balances are paid in full.

To get started, list all your debt, and configure it in order from small to big. Put as much extra money as you can afford toward the smallest payment. By rolling money from the smallest balance to the next on your list, you are accelerating the rate of paying off your debt.

Advantages and disadvantages:

• PROS:
  • Builds motivation by settling debts faster
  • Easy to implement
• CONS:
  • More expensive overall due to additional interest
  • Can take longer to pay off all your creditors

The debt avalanche method involves making minimum payments on all your outstanding credit card accounts. You then add any remaining money to the creditor with the highest interest rate. This cycle continues until you have paid every credit card balance in full. Using the debt avalanche method will save you the most in interest.

Make a list of your individual debts, arranging them in order from the highest to the lowest interest rate. Now total your minimum monthly payments to get an idea of how much you need to cover those bills. Then subtract that sum from the amount earmarked for your monthly bills. Now you will know how much extra money you have to start paying off your first bill.

Advantages and disadvantages:

• PROS:
  • Minimizes the amount of interest you pay
  • Lessens the amount of time it takes to pay off your debt
  • Good for budget-oriented people
• CONS:
  • Takes discipline and commitment to pull off
  • Requires a constant amount of discretionary income

With the right strategy, paying off your debt could be faster and less stressful than you think. Choose the plan of action that works best for your financial situation and your comfort level.

• Pay off high interest credit cards first
  As discussed above, the debt avalanche method will save you the most in interest payments.
• Categorize your debt
  This simply means that you sort all your debts to see which one has the highest interest rate.
• Pay off the smallest debt first
  As discussed above, you pay off your credit card debt from the smallest to the largest balance using the snowball option.
• Pay more than the minimum
  If you pay more than the minimum balances on your credit cards, you can resolve your debt faster and save on interest.

Planning for the future helps you take the proper actions needed to reach your goals within a specific timeframe.

• Set goals
  Make a list and determine if the goal falls into the short-, intermediate- or long-term timeline. For instance, a short-term goal (within a year) could be saving money while a long-term goal could be preserving your lifestyle in retirement.Write down the steps necessary to achieve your goals, then do what is necessary to achieve them. Stick firmly to your plan for the best chance of success.
• Determine your spending priorities
  Decide which credit card payments should be paid off first. This could be high interest rate credit cards or tackling the smallest balances first.
• Create a budget
  Following a budget can help keep your spending in check and your savings on track. It takes discipline not to fall back into old spending habits but if you stick to the plan, it can become second nature.
• Identify the problem
  If you took on debt due to a job loss, unexpected medical event, death, or a different challenge, it could be a one-time event through no fault of your own. But if impulse shopping got the best of you, it is time to reset your spending habits if you have any chance of remaining debt free.
• Hire a Debt Relief Expert
  You might want to consider working with a Debt Coach at National Debt Relief. They can help you choose the best payment option for your situation. Then you may pay off your debt for less than you owe, and in a shorter amount of time.

Debt relief isn’t a one-size fits all solution. So, before going over your options, see if you qualify to enroll in a debt relief program.

You might want to consider this repayment method if:

• You are paying just the minimum on your credit card bills or other loans
• You are still up to date on your bills, but you are living paycheck to paycheck
• You have tried to cut down your debt by yourself, but it hasn’t worked, and you need help
• You are so overwhelmed, you have considered drastic solutions like bankruptcy

If you are still accumulating debt, debt relief alone may not be enough. You may also need to address the spending habits that are holding you back. A National Debt Relief Debt Coach can walk you through your options and then support you throughout your journey.