Last Updated on November 1, 2022
There is nothing that gives discomfort as debts, they can worry you emotionally and psychologically, if not handled efficiently.
If you’re having difficulties paying or managing your debt and you don’t have an idea to go about clearing off your debt, worry no more and stay here with us we have a way out for you.
In this article, we’ll look at the 15 best ways to pay off credit card debt for credit card users. But before we continue with the list, let’s get to know briefly what a credit card is. What should you pay attention to with credit cards? The perks or benefits you can get as a credit card holder and finally, how to pay off your credit. Do you find this interesting? Then read on to equip yourself with valuable information.
Table of Contents
What is a Credit Card?
A credit card is simply a convenient financial product (plastic or metallic) that can be utilized for purchasing day-to-day needs such as food, groceries, gas, and other goods and services alike. Credit cards can also come in very handy in the purchase of large items like jewelry, machines, TVs, and travel packages because they usually require funds that might not always be readily available at our disposal.
Advantages/Benefits of credit card
The benefit of credit cards is not limited to purchasing goods and services on credit. There are lots of other benefits you can derive from a credit card holder. Below are some of the benefits you are provided with as a credit card holder, they include:
- Credit cards make traveling easy
- Owning a credit card will allow you access to discounts
- It also enables you to earn unlimited reward points such as cashback or miles points
- It offers security or protection against credit card fraud
- Insurance coverage is also part of the benefit you can derive as a credit card user
- With a credit card, you can buy or make purchases of items you need credit
- It is a widely accepted means of payment for goods and services
- Credit cards offer no foreign transaction fees to credit card users
- Another added advantage of owning a credit card is that it increases your purchasing power
- It’s a means of improving your credit score
- Credit cards offer credit card users interest-free cash withdrawals
- A credit card also enables you to keep track of your expenses
That said, let’s proceed by considering what to look out for in a credit card.
What to look for in a Credit Card?
Choosing a credit card is a major financial decision as well as having a sound knowledge about every aspect of the card before opting for one. In order to achieve the expectations that come with using a credit card, here are key features for when considering owning one. They include:
Fees
There are a number of fees that comes with credit cards such as foreign transaction fees, annual fees, late payment fees, and balance transfer fees. You might not encounter some of these fees for instance the late payment fees if you utilize your card responsibly. However, other fees like the annual fees might be unavoidable and you might be on a hook for them year after year.
Rewards
Credit card rewards normally run the complete range, from hotel points and retail perks to cash back and airline miles. Every credit card with rewards has an exceptional offer and a unique set of terms that applies to how rewards are earned and redeemed. A way out of this is to find a card with rewards that befit your spending profile.
Promotion
Credit cards offer promotions such as welcome bonuses that offer enhanced rewards for a specific timeframe, introductory APRs, or 0%APR on balance transfers, which are the common means for card issuers to attract new applicants. With these offers, you are opportune to squeeze extra rewards from your credit card or lower your interest rate temporarily, although it’s important you have a better understanding before you fully take these advantages.
APR
Credit cards can have several APRs among them such as the introductory APR, the standard purchase APR, the penalty APR, the balance transfer APR, and the cash advance APR. To better enjoy this benefit, it is important you understand all of them and make comparisons across each card while weighing your options.
Acceptance
One important factor to look out for when opting for a credit card is to determine if the card is accepted as a means of payment where you shop. Some credit card networks are more widely accepted than others. It’s advisable to research the footprint of the card issuers you’re considering, to endure the one you’re choosing is widely accepted.
Security
Another important factor to consider amongst the things to look out for on a credit card is the security features it offers. Things you need to consider when looking out for security are if the card issuer will text you if your Social Security Number is used to run a credit check if you can be able to disable your card at ease, in case of theft, or when it gets missing. Such features as these can allow you to have peace of mind supposing anything goes wrong.
Now that you have been equipped with the knowledge of what a credit card is, the advantages that come with it, and what to look out for in a credit card, let’s now dove into the primary concern of this article which is, how to pay off credit card debt. Keep reading for more information.
15 Best Ways To Payoff Credit Card Debts For Credit Card Users
1. Take Advantage of Balance Transfers
A balance transfer enables you to move your debt from one account to another, possibly taking advantage of low introductory rates. This is a perfect strategy to employ if you’re sure you will be able to off the balance in no distance time.
2. Create a Budget
One effective way to pay debt and effectively manage income is by creating a budget and sticking to it. In order to pay off your credit card debt, you should start by tracking your income as well as your expenses with a monthly budget. Setting a budget allows you to be organized when commencing the payment of your credit card debt.
3. Pay More Than the Minimum Balance
Another effective way to make a real impact on your debt amount the 15 best ways to payoff credit card debts for credit card users is by paying more than the medium balance on your credit card statements every month.
4. Pay Off the Most Expensive Debt First
This method involves tackling the debt with the most expensive cost through the utilization of a strategy called the avalanche which involves making payment of debt with the highest interest rate first. This strategy could save you money in the long run by paying off bad debts by focusing any extra cash you have that’s available on the most expensive debt you might have incurred from credit card debt more quickly
5. Stop Your Credit Card Spending
You might want to stop your credit card spending by removing your credit card from your wallet completely if overspending is making you pile up debts unnecessarily. It may seem too easy, but it comes in handy in putting away the temptation to overspend and also allowing you to concentrate on getting your spending and finance under proper control.
6. Change Your Habits
According to Colin Moynahan, overspending and the accumulation of large debts are usually tied to behavioral issues. One of the effective ways amongst the 15 best ways to pay off credit card debts for credit card users is by changing your habit by being honest and sincere to yourself concerning your day-to-day habits and spending, then making the necessary lifestyle needed to pay your debts.
7. Use a Debt Replacement App
Debt repayment apps like Tally and Undebt, assist users to keep track of their debts and provide a visual, simple-to-understand tool for paying off debts. With these apps, you can enjoy the benefit of free credit reports and services that enables you to closely monitor your credit scores.
8. Credit counseling
Credit counseling services rendered by nonprofit organizations assist you in managing your debt and improving your financial knowledge, especially if you’re a beginner in personal finance management.
9. Consolidate multiple debts
Another means of paying credit card debt to consider among the 15 best ways to pay off credit card debts for credit card users are consolidating multiple debts as this helps you to repay debt faster by combining different high-interest rate loans or credit card balances into a new loan with a lower interest rate.
10. Pay off the Smallest Debt First
Paying off your credit card debt by starting with a small debt is easier than taking a huge sum of student loans or mortgage debt as it provides you with the motivation you require to progress on the journey of your debt payment. This strategy which is known as a snowball can save you money in the long run by getting rid of your credit card debt, more quickly.
11. Increasing Your Income with a Side Hustle
Increasing your income stream with a side hustle by taking a second job or freelancing project will help you generate more stream of income to pay off your credit card debt faster. Jobs to consider may include virtual assistant, tutoring or you can engage in pet sitting, which is easy to start and has the potential of fetching enough cash to pay off your debt.
12. Pay more than once a month
This involves you paying your credit card debt more than once a month. This method amongst the 15 best ways to pay off credit card debts for credit card users, will offer you the ease to stay on track and be consistent in repaying your credit card debt. Also paying your credit card debt more often may also lower your balance/utilization ratio, which is the percentage of your overall available credit that is used, which also is one of the components utilized by credit reporting agencies in calculating your credit score.
13. Tapping into your home equity
Those who have equity in their homes can be able to utilize it in repaying credit debt. A home equity line of credit may provide a lower rate than what your cards charge. Bear in mind that closing costs often apply.
14. Review your spending
You can review your spending by categorizing your spending s and expenses every month, from groceries to transportation, accommodation to entertainment. Your credit card statement can be a helpful tool to help you in categorizing your spending and deciding on areas you can cut off and use the money you would have freed up for paying down your debt.
15. Pay with cash
One suitable way to effectively manage your overall debt is to consider making purchases of things you need with cash. Utilizing cash or debit card as an alternative means of payment will help you to avoid unnecessarily overspending or making purchases based on impulse as well as eliminate any extra fees that make be incurred when paying with a card and also understand how much is going out compared to what’d come in either in a week or month.
Conclusion
If you carry credit card balances from month to month, paying off your debt in no-distance time can be faster and quite easier than you might imagine. The key to effectively tackling this piled-up debt is to create a good plan and stick to it. We hope the 15 best ways to pay off credit card debts for credit card users can help you decide on the most suitable and effective strategy that will assist you in paying off your debt faster with ease and getting a head start on reaching your goals.