The Card Debt Epidemic:
According to the Federal Reserve the United States currently has $793.1 billion dollars in credit card debt, or almost $16,000 per household in debt. With the average interest rate being in excess of 20% it doesn’t take long for you to realize how bad the situation truly is. This article I’ll focus on the best way pay off this type of debt.
Best Way To Pay Off Card Debt:
There is a systematic way to approach the overwhelming credit card debt you have put yourself into.
1.) Take every credit card you have debt on and put them on a table so you can see how many cards you really have to get yourself focused on success.
2.) Look up how much debt you have on each credit card and then rank these cards from most debt to less debt while ensuring that you have written down the amount owed.
3.) Look up the interest you are paying on each card each month and again write these numbers down next to the appropriate cards.
4.) This step is crucial to your success. You want to take your highest debt and highest interest card first and make the conscience decision to pay this card off first by making extra payments.
5.) If you have a situation where your highest debt credit card is not the highest interest rate card, find out which card you are paying the most interest one as more than likely it’s the highest debt card.
6.) Use my earlier post on how to create a budget to plan on these debt payments.
7.) Making over payments on the highest card while maintain minimum payments on the rest of the cards will ensure that the overall interest you pay back to your lender will be taken care of.
8.) Continue this process by knocking out the next highest card and so on until your debt has been taken care of.
Something I do recommend in extreme cases when debt is really high and you’re being crushed by interest is the transfer the balance to an introductory 0% APR card. This way all of your payment is going straight toward the amount you owe with nothing going toward interest. The downside is that you will have a hard credit pull against your credit record which could lower your overall credit score but desperate times calls for desperate measures.
Credit card debt is arguably one of the hardest debts to take care and many people fail because they don’t have a plan. I have provided you a plan of action above that if used will help save you countless dollars in interest payments. This journey starts with the first step. Let me know what you think about what’s worked for you.