How To Pay Credit Card Debt

Tips to Help Pay Down Your Credit

Tired of opening your account statements and seeing a high balance? Do you experience mini panic attacks whenever you think about how much you owe your creditors? Countless people are in similar situations. And while you might be ready to give up or feel that debt elimination is impossible, know that you can pay credit card balances and enjoy peace of mind.  

Step 1

Get familiar with your interest rates to help pay credit card balances and lower your debt. Your credit card interest rate is more than a number. This number or rate actually impacts how fast you can pay down your balances. This rate decides your minimum payment and decides how much of your payment is applied to the principal and interest. Check your statements to find your percentage rate. A good interet rate on a credit card is under 10 percent. If you're paying over this amount, perhaps it's time to negotiate a better rate. Call your credit card company and ask the rep to lower your rate. Negotiating a rate reduction is hit or miss, and depends largely on your payment record. Consistently pay credit statements on time and maintain a good credit score, and the credit card company is likely to grant your request. 

Step 2

Increase your payments to pay credit card balances. Lets face fact: you can't pay down your balances if you develop a pattern of only paying your minimum. With your interest rate reduced, use this as the opportunity to increase your monthly payments. The creditors will apply the additional funds to your principal, and this helps drop your balances faster. Rather than open your new statements and see balances that remain practically the same, you'll notice a significant drop. Keep up with this pattern and you'll pay off your balances in record time. 

Step 3

Consolidate to a low-rate card to pay credit card balances faster. Go to your bank and discuss your consolidation options. Don't assume that you don't meet the qualifications for a loan. If you have a good credit score and collateral, you might be a good candidate for a debt consolidation loan. This lets you combine all your credit cards and loans into one loan, and then payback this loan over the course of three to seven years. The consolidation loan has a lower interest rate than your credit cards (on average), which helps you save money and pay credit down at the same time. 

Step 4

Controlling yourself and limiting your purchases is key to paying down balances. You can't pay credit card debt down if you always use your card for purchases. Debt likely accumulated as a result of poor spending habits and overindulging in luxuries. Change your mindset and modify your habits to not only pay credit card debt, but avoid debt problems in the future. Don't leave the house with credit cards in your wallet. You don't want to cancel your card, but you can go commando on your plastic and shred the cards into a million pieces. Live on cash alone; and if you can't afford an item, leave it in the store. 

Step 5

Don't hesitate to get second employment if you're serious about paying down your balances. Think of your second job as a temporary situation to help reach your goal. You need disposable income to pay credit card debt. And if your present full-time job doesn't bring in additional income, there's no shame in flipping burgers, babysitting, cutting grass, or doing whatever it takes to generate extra income. 

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