If you've got a lot of credit card debt, it's best to get rid of it as soon as possible. Read here to learn about the fastest way to pay off credit cards.
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Millions of Americans have credit cards -- and only half actually have enough money saved to pay them off.
Being in debt doesn't just drain your finances. It can drain you emotionally, too. That leaves a lot of people searching for the fastest way to pay off credit cards.
Want to learn how? Read on.
Understand Why You're In Debt
If you've never taken the time to think about how you got into credit card debt, none of the strategies below will help you. You'll just end up in debt all over again because you didn't change your habits.
Is the credit card debt from a temporary financial hardship, or did you buy something you knew you couldn't afford? Do you make a habit out of online shopping with a credit card?
Take a hard look at your spending habits. Is there a place you could cut back? Any behaviors you need to quit?
Once you've done that, you can start aggressively paying off your debt.
Leave Your Cards At Home
Simple, but so effective.
If you're actively trying to reduce your credit card debt, don't add any more work. Pay for your items with debit cards or cash.
If you know you'll be tempted to use a credit card if you carry one with you, leave it at home. Then you won't be able to use it to make impulse purchases that you'd regret later.
Pay More Than the Minimum
By itself, this is the fastest way to pay off credit cards.
Just making the minimum payment keeps you in debt for longer -- and it actually increases your debt. You can thank the high interest rates on credit cards for that.
Paying more than the minimum, on the other hand, reduces the principal faster. That means that there's less money there to accrue interest.
You'll pay off your debt faster and save money.
Pay Off Cards With High Interest Rates First
Let's say that you owe on multiple credit cards. What do you do then to get out of debt?
One strategy is to pay off the cards with the highest interest rates first. Similar to paying more than the minimum, this is a strategy that will save you money on interest in the long run.
Keep making payments on your other cards, but direct more resources towards the high interest card. You'll see overall results faster.
Pay Off The Card With The Lowest Balance
To see immediate results sooner rather than later, aim to pay off the card with the lowest balance first.
Why? It'll give you a great feeling of accomplishment once you've completely paid off one card.
You'll also be able to redirect the money you were spending on that debt to make higher payments on your other credit cards.
How Do I Choose The Fastest Way To Pay Off Credit Cards?
It all depends on your situation. Some people have debt spread out across multiple cards. Others have a minimal amount of debt on one card and a mountain of debt on the other.
Step back, assess your personal situation, and then go from there.