Have you seen the balance on your credit cards increase over time and are wondering how to pay it down quickly?
Wondering if it’s best to consolidate all that debt into one account to avoid interest?
Given the recent stimulus packages and the fact that it’s tax season, now might be a good time to really pay down your credit card bills. While transferring all the balances to a new card will cut out all the other interest from several cards, it might really hurt your credit score short term.
BUT… that’s not a bad thing if you’ll save a ton of interest. If you decide to go this route, make sure you find an offer for a new card that has a 0% APR for the first few months (if you can qualify). This will give you some serious time to do some damage to the balance.
If you don’t want to go that route, you can possibly lower your interest rate. For example, if you have enough equity in your home, you might be able to apply for a home equity line of credit, which will have an interest rate that’s a lot lower than your credit cards. But there are downfalls, too, such as having to pay closing costs in order to open this line of credit. Plus, if you don’t pay your payments on time, you risk losing your home.
You might also think about taking out a personal loan to pay off those credit card balances. These rates aren’t usually as low as the home equity one, but they are better than many Mastercards or Visas.
The biggest plan of action to paying off your credit card debt is budgeting better and cutting out anything you don’t need out of your budget. Create a plan of action and see if you can pay double the required minimum. Whenever you have extra cash, put it towards the bill.
What other tips or tricks do you have to pay off credit card debt?
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