5 Steps to Paying Off Credit Card Debt

Dec 20, 2018

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Around the holidays is when a lot of people tend to get into financial problems, using credit cards to buy presents and go on trips. According to  Magnify Money, the average holiday debt in 2017 was $1,054. That can be a lot to put on top of your monthly expenses, and if you already have a substantial balance on your cards, you may be ending the year deep in a hole of debt. If you need to get on a path to fixing your credit card debt in 2019, here’s 5 steps to get you started: 

Step 1: Track everything you owe 

Make a list of every credit card you have that carries a balance, what that balance is and what the interest rates are. Write down every car payment, student loan or mortgage you have, to get a real number for the debt you owe. It might be stressful, but without knowing you will not be able to make a real plan of attack to tackle your financial goals.

Step 2: Target one debt at a time 

It is easy to seem overwhelmed with debt when you look at the big picture. Break it down into small doable goals. Take on one credit card at a time and start with the highest interest rate. After you pay off one card, it's a good idea to take all the money you were putting toward that card and apply it to the next card. This will accelerate the payoff and reduce interest costs.

Step 3: Consolidate credit 

If you have several credit cards with high-interest balances, try consolidating this debt into a lower rate. This will allow you to pay it down faster with lower monthly interest rates. Look for low balance transfer offers or call your credit card company to see what kind of lower interest rate payment plan you could make.

Step 4: Pay more than the minimum payments 

Pay as much as you can each month towards your credit card balances. It will generally take longer to reach financial freedom if you pay only the minimum payment.

Step 5: Maintain consistency 

Now that all debts are accounted for and at favorable interest rates, be extra diligent about not missing a payment. It is important to avoid late charges and penalties that can slow down the payoff process.

Following these five steps can help towards getting your credit freedom back and under control. To help moving forward, consider using a debit card for purchases instead of a credit card. Many banks have apps that allow you to set custom spending limits and send alerts when you exceed those limits. If you would like more information, contact the experts at NASB at 855-338-0915, or click here.

The content of this blog is for informational purposes only. The aforementioned list is not intended to be all-inclusive. NASB is not a credit counseling service nor do we provide debt counseling or consolidation services.