4 Smart Ways to Pay off Credit Card Debt
When used responsibly, credit cards can help you build up your credit score and earn all kinds of rewards. However, there is a danger with putting all your purchases on the credit card. You could get into a situation where you are accumulating more credit card debt than you can afford to repay.
Pay more than the monthly minimum requirement
Paying only the minimum amount lengthens the process of eliminating your debt. A better option is to find expenses within your budget that can be cut and put that money toward your credit card payment. Habits like eating out or making coffee trips can really add up. Those small sacrifices can really aid in alleviating your credit card debt.
Switch to a credit card with a lower interest rate
Since interest can be a substantial part of what you’re paying on your credit card each month, make sure the card you’re using doesn’t have an excessively high interest rate. This can prolong your efforts to pay off the credit card. If your card has an interest rate of 15% or higher, look into transferring your balance to a lower interest card.
Consolidate debt with loans or lines of credit
By consolidating your debt, you are bundling all of your outstanding debts into a single debt. Not only will debt consolidation help you better organize your monthly payments, but it should also allow you to pay less in interest than all your previous rates combined.
Having a monthly budget
A budget is a plan that helps you manage your money. It helps you figure out how much money you get, spend and save. Making a budget can help you balance your income with your regular expenses and guide your spending to help you reach your financial goals.
If you’re looking for a credit counsellor in Toronto, get a quick assessment with us today or call us at 416.900.2324. We will help you develop a plan, reduce your interest costs and get out of debt quickly.