Credit card debt is extremely common and so is figuring out what to do with it. The obvious answer is to pay it off, but what if you’re feeling overwhelmed by the balances creeping higher and higher while you tread water? Here are six methods for managing and lowering your credit card debt you may not have tried but are worth looking into!
Use the Snowball Method
The snowball method is a popular approach to dealing with outstanding credit card debt. List your debts from smallest to largest. Focus on paying off the smallest one first while making minimum payments on the others. Once that debt is gone, take the money you were using to pay it off and apply it to the next smallest debt.
Use the Avalanche Method
The other common approach is almost the opposite: the avalanche method. This approach involves paying off your debts from the highest interest rate to the lowest. Use online calculators to determine how much you’ll save in interest by using the avalanche method versus the snowball method. They both work well, but some might gravitate toward one or the other based on their financial situation.
Try a Vision Board
Creating a debt payoff vision board can be a fun and visual way to keep your goals front and center. Gather images and quotes that inspire you to pay off your debt and display them prominently in your home. Include specific goals, like “Pay off $5,000 by December” or “Celebrate being debt-free with a trip to the beach.” Every time you see your vision board, you’ll be reminded of your goals, and it’ll motivate you to stick to your plan.
Negotiate With Your Credit Card Company
If you’re struggling with high interest rates or fees, pick up the phone and call your credit card issuer to let them know what you’re dealing with. Mention your good payment history (if applicable) and express your desire to continue being a loyal customer. You’d be surprised how much they’re willing to work with you.
Use a “Debt Jar”
If you’re a visual learner, the “debt jar” method might be just what you need. Get two jars—one for debt payments and one for savings. Every time you make a payment towards your debt, put a little money in the savings jar. It’s like rewarding yourself for being responsible! And once you’ve hit a certain milestone, you can even treat yourself to something special for sticking with your method.
Consider a Balance Transfer
If you have good credit, consider transferring your high-interest credit card debt to a card with a lower interest rate. This can save you money on interest and help you pay off your debt faster. Look for balance transfer cards that offer a promotional 0% APR for a certain period. Just be sure to read the fine print and understand any fees associated with the transfer. And remember, once the promotional period ends, don’t let your spending habits run wild. Otherwise, you’ll end up in the same predicament.
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