Advantages of credit card statement
The moment you decided to take credit for the first time, you shall be very careful with your credit statement. It will teach you how to pay off debt fast. The main key is the information about all transactions on your credit account, including payments, charges, fees etc. You will be able to see your current balance and the available credit.
This source also provides information about your possible debt. If you feel like closing it fast, use one of the following strategies.
1. Pay no less than minimum on all your cards
There is no good in paying off one debt while you’re getting more penalties and charges on the other one. On the other hand try to pay a bit more then minimum. The reason is that minimal amount consists only of charges and fees. It doesn’t scratch your actual debt leaving you with the same amount of payments for the next month.
2. Choose the debt you want to close first
After you’ve paid your monthly charges for all cards, direct the money you’ve left tothe chosen account. This might be the one with highest interest rates. This way you will save your costs by keeping yourself from additional enormous fees. If your interest rates are more or less the same, choose the smallest account that’s easy to close. You will end up having one account less. Be sure this will make you feel happy!
3. Consolidate your debts
Sometimes people do not know how to pay off debt fast due to high interest rates and enormous fees. These additional payments come from you paying late, not from the debt itself. By consolidating your debts you will get one single debt with minimal interest rate and no charges from the very beginning. This will help you to get on your feet, not to mention that collector calls will stop at once. By the way, you will improve your credit record significantly.
4. Plan your budget
This is really important, since your life in debt is not the one you had before. While paying off the debt, you have to hold yourself from luxuries, even from really tempting ones. Restaurants and cafes, fashion boutiques and cinema are not for you for a while. If you feel like spilling, think about the amount you managed to shove off your debt already. Consider the time you need to close all the debts. This will help you to hold on.
How to pay off debt fast?
A simple math lesson will help here. When the person appears to be deep in debts, he may get lost in multiple credit card bills, interest rates, fees and charges. Do not get confused, it’s not as hard as it seems to cope with this problem. Let’s divide the whole solution into several easy steps.
1. Put your debts in order
Debts with high interest rates are the priority. These are debts with rates from 10% and more, like cards provided by stores. These cards are unsafe due to the promotional rates offered to clients the moment they get the card. After these luxury promotional advantages end, you may find the card rather destructive for your budget. The lenders must notify the person about rising rates; still you may miss the note as well. Also keep in mind that your interest rate is not getting lower after you improve credit score.
2. Make at least minimal payments
Remember, by paying off only minimal amount of money for each account, you just stop your credit from growing – but you do not lessen it. The minimal amount only consists of monthly charges you must pay not to make things worse. In order to close the debt, you must pay more than minimum.
Mention payment dates in the chart, so you won’t be late. It’s very important due to late payment charges you might face in case you miss the correct date.
3. Pay the highest rates debts first
This way you will close the source of the greatest financial problem right away. This kind of accounts is devastating for your finances due to payment sum growing rapidly. As a result you do not lessen the debt while still paying.
4. Do this monthly!
Stick to the offered strategy month after month until you dig your way out of the debt hole. After you close the account, remove it from your chart. You may also need to reorder your accounts time after time in case interest rates change.
Any other ways?
Some people prefer the “Debt Snowball” method, where you pay off smallest debts first. This offers you the feel of early success since you decrease the number your debts in month or two. This provides you with enough courage to go on with your strategy. Still, the “Debt Avalanche” method while being not that obvious can save your costs. This is all about math after all. You shall not think emotionally about your money, the rational thought will do more good.
If you need some reward for your efforts, make it not for the closed card, but for the first $1000 paid off. Not that obvious? Still a lot more effective.