If you carry credit card balances month to month, it can be misleading to assume their convenience outweighs the cost. The following strategies can help you decide which course to take in order to quickly pay off any credit card debt.
Target one debt at a time
Do you carry a balance on more than one credit card? If so, make sure you always pay at least the minimum on each card. Then focus on paying down the total balance on one card at a time. You can choose which card you target in one of two ways:
- Pay more than the minimum
Look at your credit card statement. If you pay the minimum balance on your credit card, it takes you much longer to pay your bill in full. If you pay more than the minimum, you’ll pay less in interest overall.
- Consolidate debt
Consolidating your debt lets you combine several higher-interest balances into one with a lower rate, so you can pay down your debt faster without increasing payment amounts. Here are two common ways to consolidate debt.
- Transfer balances
Take advantage of a low balance transfer rate to move debt off high-interest cards. Make sure you check the full terms and conditions on where you plan to transfer your balances to. For example, make sure there are no transfer costs, or that the rate of interest you’ll be paying in the future are favourable.
- Convert to a term loan
A term loan means that the time to repay it is fixed. This could be 12 months, 24 months and much longer. Check out the Aviate Credit Union debt consolidation loan options on our website. But if you are looking at this option, make sure you fully understand the total cost of interest you’ll end up paying but as a general rule of thumb, this can reduce the total cost of interest you’ll end up paying than if you kept up with the minimum payment option on your credit cards.
- Review your spending
Start by categorising your monthly spending, for example: weekly food shopping, transportation, housing and entertainment. Your credit card statement can be a helpful tool. Look for areas where you can cut back. Then take the money you’ve freed up and apply it to paying down your debt.
- Pay with cash
One way to manage your overall debt is to consider purchasing things with cash. Using cash or a debit card can help you avoid overspending or making impulse purchases.
- Use financial windfalls
If from time-to-time you receive extra cash, use it to boost repaying debt. A lump sum payment against an outstanding credit card debt can work wonders at reducing the overall cost of how much interest you end up paying, which ultimately means more money in your pocket.
If you carry credit card balances month to month, it can be misleading to assume their convenience outweighs the cost. The following strategies can help you decide which course to take in order to quickly pay off any credit card debt.
Target one debt at a time
Do you carry a balance on more than one credit card? If so, make sure you always pay at least the minimum on each card. Then focus on paying down the total balance on one card at a time. You can choose which card you target in one of two ways:
- Pay more than the minimum
Look at your credit card statement. If you pay the minimum balance on your credit card, it takes you much longer to pay your bill in full. If you pay more than the minimum, you’ll pay less in interest overall.
- Consolidate debt
Consolidating your debt lets you combine several higher-interest balances into one with a lower rate, so you can pay down your debt faster without increasing payment amounts. Here are two common ways to consolidate debt.
- Transfer balances
Take advantage of a low balance transfer rate to move debt off high-interest cards. Make sure you check the full terms and conditions on where you plan to transfer your balances to. For example, make sure there are no transfer costs, or that the rate of interest you’ll be paying in the future are favourable.
- Convert to a term loan
A term loan means that the time to repay it is fixed. This could be 12 months, 24 months and much longer. Check out the Aviate Credit Union debt consolidation loan options on our website. But if you are looking at this option, make sure you fully understand the total cost of interest you’ll end up paying but as a general rule of thumb, this can reduce the total cost of interest you’ll end up paying than if you kept up with the minimum payment option on your credit cards.
- Review your spending
Start by categorising your monthly spending, for example: weekly food shopping, transportation, housing and entertainment. Your credit card statement can be a helpful tool. Look for areas where you can cut back. Then take the money you’ve freed up and apply it to paying down your debt.
- Pay with cash
One way to manage your overall debt is to consider purchasing things with cash. Using cash or a debit card can help you avoid overspending or making impulse purchases.
- Use financial windfalls
If from time-to-time you receive extra cash, use it to boost repaying debt. A lump sum payment against an outstanding credit card debt can work wonders at reducing the overall cost of how much interest you end up paying, which ultimately means more money in your pocket.