It’s no secret that credit cards can easily attract debt due to the interest rates charged on outstanding balances. Credit card debt can quickly spiral from a small amount to considerable debt, making it an onerous burden to bear.
However, it’s worth knowing that credit card debt can happen to the best of us, and it is possible to pay off your debt and get back to enjoying all the perks of owning a credit card – without the hefty costs.
Even if you’re reeling under credit card debt presently, don’t lose heart. There are options available to help you get your finances back on track. There are small steps you can take to pay off your credit card debt for good.
Steps for paying off your credit card debt
1. Set a goal for yourself
It can help to set a realistic goal for how much you can afford to pay towards your credit card debt each week or month. This can be done by assessing the total amount you owe on your credit cards and then updating your budget to direct much-needed funds towards chipping away at this debt.
2. Pay more than the minimum
One of the best ways to reduce your credit card debt is by paying more than the minimum amount due. The average minimum repayment for a credit card is $20 or 2% of the balance, whichever is greater.Unfortunately, when you only pay the minimum amount due, you’re barely chipping away at the debt, and often just paying off the interest on the balance. This does not effectively reduce your outstanding debt, and can mean that a $10,000 credit card debt takes you 40 years to pay off in full.
3. Consider a balance transfer credit card
A balance transfer card allows eligible customers to shift your existing debt to a new card that charges zero interest for a set period – usually several months to two years. This may help some cardholders to save money on interest charges during the initial period, giving you much-needed breathing room to pay off the debt without accruing more interest.
4. Speak to your credit card issuer
If you are really struggling to pay off your debt, keep in mind that most credit card issuers should be willing to work with their customers through their financial troubles. By speaking to your credit provider about your situation, you might be able to arrive at a more comfortable repayment plan.