All About Your guide to paying off credit card debt
There are several steps you should take to get out of credit card debt. Paying off credit card debt that’s several thousand dollars or more takes time, so you must discipline yourself.
The key is to make debt a priority.
I usually find setting a goal of paying down debt in 36 months or less works best for people. If the end goal is any further out than that, people tend to lose their focus.
Once you decide to make your debt a priority, you need to start paying more than the minimum monthly payments. That will allow you to eliminate the debt faster, save money on interest — and most importantly, stay motivated to get the job done and behind you.
Most people only pay the minimum on their credit card bills each month when they could actually afford to pay more. Your statements make the minimum amount very clear, so that’s what most people focus on.
But there’s a better strategy you should consider.
Take a look at your monthly statement, and instead of focusing on the minimum payment, pay attention to the box that shows how much you need to pay each month to get the debt wiped out in 36 months. When you give yourself a shorter time period, your progress is tangible — so you can actually see your debt significantly decreasing as the months go by.
Want to pay off your credit card debt? Here’s how to get started.
Laddering is your friend: If you have several cards, your first goal is to pay off the card with the highest interest rate. This process is called laddering. Pay more money toward that credit card and slightly less toward the other cards, until the card with highest-interest debt has a zero balance. Then you move onto the next card, and so on and so on. Resist the temptation to close the account when it’s at a zero balance. Doing so will only hurt your credit score.
Use the calendar to your benefit: One proven way to pay more toward the card with the highest interest rate — and to get rid of it faster — is to make a separate half-payment every 14 days to the credit card company.