Manageable Steps to Pay Off Credit Cards

Credit cards can be invaluable tools for building a strong credit profile and achieving your long-term goals. However, when used irresponsibly, they can be just the opposite. Credit card debt is expensive, and the more you wrack up, the more difficult it becomes to pay down. 

Credit cards often come with high interest rates, making them one of the most expensive ways to borrow money. When you only make the minimum payment each month, your balance rolls over to the next month. While this may not seem like a big deal at first, it will become one once you realize that as much as half your payment goes toward interest and not the balance. Bearing this in mind, the best thing you can do is to pay off your balances in full each month, but if you’re beyond the point where you can comfortably do so, it may be time to adopt an aggressive but feasible debt reduction strategy. 

3 Effective Ways To Pay Down High Credit Card Debt 

When allowed to spiral out of control, credit card debt is bad for your credit score, financial health, and mental well-being. If you know this all too well, it may be time to stop swiping and start doing the following: 
 

• Use Cash: Research shows that individuals who use cash spend less than those who use a card. According to one MIT study, individuals who used credit to buy sporting event tickets spent 83% more than those who used cash. The “buy now, worry later,” mentality that credit cards evoke is dangerous, so if you’re serious about paying down your debt, use cash. 

• Prioritize High-Interest Card Payments: The highest credit card interest rate is 36%, meaning that the issuer will charge you 36% of your total balance each month until you reach zero. Make as big of a payment as you can each month on the card with the highest interest. Once that card is paid off, work on the second most expensive card and so on. 
   

• Avoid New Debt: The worst thing you can do when trying to pay down debt is to add to it. Unless you find yourself in dire straits and unable to pay for an emergency expense or monthly bill, avoid using your credit cards for the time being. 
   

Get On the Road to Financial Freedom  

It can take a single purchase to put yourself into unmanageable credit card debt, but it can take months or even years to get out of it. While you cannot undo the damage, you can minimize its impact on your financial health and overall well-being by using cash, paying down high-interest cards, and avoiding new debt. Commit yourself to this plan to achieve financial freedom sooner rather than later.