Are you looking for tips to help you pay off credit card debt fast?
This post is for you.
Between the ease and access to spending money you don’t have, and the high interest rates that come with credit cards, it’s easy to lose control of your finances. Additionally, few things will destroy your financial future faster than credit card debt. So, I don’t blame you for wanting to pay it off as fast as possible. In fact, I commend you for taking a positive financial step.
But here’s the thing, paying off credit card debt isn’t an easy task. If it were, I would have no reason to write this article. Rather, it takes a lot of hard work and sacrifice.
That said, if you are up to the challenge, and ready to work toward a life completely free of credit card debt, keep reading. In this post I am going to cover 21 tips that will help you pay off your credit card debt as fast as possible.
Let’s dive right in!
1. Get Everything On Paper
The first step to paying off your credit card debt as fast as possible, is to write the balance of every single credit card you own on a piece of paper. You need to get everything out in the open so that you know what you’re up against.
Now, I will warn you, this might be a little painful.
I can tell you from personal experience that when you tally up all your debts, the math can get a little overwhelming. But don’t let it stop you — or for that matter — scare you. If you want to overcome your credit card debt, your first step is to face it head-on.
So, get out a pencil and paper, and get everything out in the open. Oh, and don’t be afraid to hang this piece of paper in a prominent spot so that you see it every day. This is a great technique to help you stay focused and motivated throughout your debt payoff journey.
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2. Use The Debt Snowball Method
Here at Be The Budget, no matter what kind of debt you are trying to pay off, we recommend the Debt Snowball payoff method. This is the process we used to get out of debt, and it worked like a charm. Beyond that, we were amazed how fast it helped us pay everything off.
If you’re unfamiliar with the Debt Snowball, it’s basically a method of paying off your debts from smallest balance to largest. Basically, you pay minimums on all your debts, and every time you pay off a debt, you use the money you were paying towards your previous debt and roll it into your next largest debt. Essentially, the payments you make toward each successive debt get larger and larger, like a snowball.
From a mathematical standpoint, this might not be the best way to pay off your debts, but from a human perspective, it is phenomenal! You see, unlike the more common method of paying off your high interest debt first, starting with your smallest balances allows you to experience some early wins, which keeps you motivated.
We believe in this method so much that we decided to include a Debt Snowball Calculator on our blog. So, if you want to figure out how long it will take you to get out of debt, be sure to check it out.
3. Pay More Than The Minimum
In addition to the Debt Snowball, we recommend making more than your minimum payments whenever you possibly can. You would be amazed at how much faster you can pay off your credit card debt when you just add a little extra fuel to your payoff plan.
Every time you get the opportunity to pay extra toward your credit card debt, take advantage of it.
4. Get On A Budget
Like any financial goal, you need to figure out a daily process that will help you achieve it. In other words, you need to get on a budget and set some boundaries in your financial life.
Additionally, budgeting can help you reverse engineer your debt payoff timeline to the point where you know exactly what you need to do on a daily basis in order to achieve it.
To give you a very elementary example, if you have $10,000 of credit card debt, at 0% interest, and you want to pay it off in one year, then you need to pay off approximately $834 per month. Without a budget, that might feel like an impossible goal. But if you lay out every expense, and give every dollar of your income a purpose, you might just find that $834 is more than possible.
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5. Shred Your Credit Cards
If you are really serious about getting out of credit card debt, then one of the first things you should do is cut up all your credit cards. I mean, what’s the point of trying to get out of credit card debt if you just continue to add to the pile?
That would be like trying to stitch a wound together before you stop the bleeding. It just doesn’t make sense.
Your credit cards are what got you into this whole mess, so kick em’ to the curb. I can tell you from experience that life without credit cards is bliss. I dare you to give it a try.
6. Start A Side Business
Like I said before, if you want to pay off your credit card debt fast, then you need to pay more than your minimum payments. So, if you really want to get after your debt payoff plan, then you should consider starting a side business.
These days there are all sorts of ways to start a business with little to no startup expenses, which is perfect for people that are trying to use their extra cash to pay off credit card debt fast.
If you like the idea of starting a side business, we have a few posts that talk specifically about it. The following posts are a few of our most popular:
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7. Get A Second Job
If starting a side business sounds a little too daunting for you, but you still like the idea of earning extra income on the side, then you should get a second job. Even a part time job delivering pizzas can earn you over $1,000 extra per month.
That kind of money can seriously speed up your credit card debt payoff timeline!
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8. Ask For A Raise
One of the surprisingly overlooked ways to bring in extra money each month, is to ask for a raise. I’m not quite sure why, but from what I have seen, most people would rather get a second job or start a side business than approach their boss about getting a raise.
I’ll admit, this route takes some guts and fortitude. However, if you’re a hard worker that shows up on time and always does your job with integrity and excellence, then many employers will gladly increase your pay.
Even if you only end up making a few bucks more per paycheck it is worth it. Heck, every single dollar helps when you’re trying to pay off credit card debt fast.
9. Cut Your Living Expenses
If you want to pay off your credit card debt at light speed, then one of the most important things you can do is cut your living expenses wherever you can. And I’m talking about scorched earth!
To give you a personal example, when my wife and I were getting out of debt, we cut our monthly food budget to $400, our recreational spending (i.e. spending money on fun) by over 50%, and completely eliminated a number of different expenses. Believe it or not, it was surprisingly freeing, and it helped us get out of debt in almost half our originally projected timeline.
If you’re looking for a few things to trim from your budget, you might want to consider cutting the following: cable, your gym membership, your daily coffee, and monthly online subscriptions. You could even go as far as reducing your monthly rent or mortgage by finding a new, cheaper place to live. That might be a little drastic, but as the saying goes, “desperate times call for desperate measures.”
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10. Avoid Balance Transfers and Debt Consolidation Loans
As much as a balance transfer, or a debt consolidation loan might sound enticing, in most situations, they can end up causing more damage than good. Between the fees associated with a balance transfer, and the extended timeline of a debt consolidation loan, using debt to get out of debt is like trying to use a shovel to dig your way out of a hole.
Additionally, one of the problems with both of these methods, is that by extending your payoff timeline, they free up a little bit more of your immediate monthly cash flow. Now, if you use that extra cash to pay off the principal of your debt, then it might make sense, but many people just see this as an opportunity to buy more things they can’t afford, and end up going into more debt than they originally started with. Ouch.
That’s why, in general, we recommend just facing your current debt head-on. Don’t try and beat the system. Just fight your way through it. The struggle will act as a reminder to keep you from going back into credit card debt ever again.
11. Know The Difference Between Wants and Needs
When you are paying off your credit card debt, you need to have a strong grasp on the difference between a want, and a need. Then, you need to avoid spending money on wants until you have accomplished your credit card debt-free goal.
To give you a little overview, needs are things like water, shelter, food, insurance, gas for your car, electricity, and heat.
Wants, on the other hand, are things like, a new pair of earrings, a new tool from Home Depot, a new rug for your dining room, or dinner out at a fancy restaurant.
The more you define the difference between a want and a need, the less money you will spend on stuff you don’t actually need — and the faster you will pay off your debt.
12. Dip Into Your Savings
Whenever I mention the idea of dipping into savings in order to pay off debt, people look at me weird. And, while I understand the warm, fuzzy comfort of having a big savings account, it doesn’t make mathematical sense to keep an excessive amount of money in a bank account, when you owe other people money. In particular, if you are paying more interest on your debt than your savings account is earning, then you should definitely use some of your savings to pay off debt.
This is one of the best ways to reduce your debt-free timeline, and pay off credit card debt fast.
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13. Get On The Same Page With Your Spouse
If you really want to pay off all your credit card debt, but your spouse doesn’t, then you are in for quite a struggle. I mean, unless you are both fighting towards a common goal, you are signing yourself up for some serious financial arguments.
In fact, if you are married, the very first thing you should do is talk to your spouse, and get on the same page. It is hard to stop a married couple on a financial mission. Just sayin’.
14. Define A Few Milestones
If you want to get out of credit card debt, then it’s a good idea to lay out some milestones along the way that will help you stay on track. Sure, your budget helps you track your progress from day to day, and month to month, but it is good to have a few wins along the way.
For example, you could toast a glass of champagne for every $1,000 you pay off. Or, you could throw a ‘halfway to debt-free’ party with your spouse and kids when — you guessed it — you hit your halfway point.
Having a few celebrations along the way will help keep you motivated, and allow you to look back and appreciate the progress you have made. This is
15. Pay Cash For Everything
If you force yourself to pay cash for every purchase while you’re getting out of debt, you will spend significantly less money.
First of all, it will keep you from doing any kind of online shopping, which might actually be the original cause of your whole credit card mess. Second of all, it will force you to go to the ATM when you want to make a purchase that falls outside your budget; making frivolous spending much less convenient.
Paying cash is a great way to get your spending under control, and keep your finances focused on paying off credit card debt.
16. Sell Your Stuff
Starting your debt free journey by paying off a large portion of your debt, is a great way to speed things up. And, selling your stuff is a great way to earn some extra money so that you can do just that.
So, if you have furniture just sitting in storage, or a bunch of clothes you never wear just hanging in the back of your closet, then you should consider putting all of it up for sale. Remember, every extra dollar you can put toward your debt is helpful, and selling your stuff can result in a lot of extra dollars.
17. Learn To Say ‘No’
Learning to say no in your financial life is one of the most important characteristics of good money management. Now, just to be clear, I’m not suggesting that you say ‘no’ to every single thing that comes your way. That would be stupid.
Rather, I’m saying that when you’re working toward a financial goal, and you are presented with a choice between saying ‘yes’ to spending money on something that will throw you off-track, or saying ‘no’, and staying on-track, then you need to learn to say ‘no’.
This seemingly insignificant skill can be the difference between achieving all your financial goals, and struggling financially.
18. Temporarily Stop Investing
If you’re buried in credit card debt, and you are putting a portion of your paycheck toward investing, then you should consider pressing pause on investing and using that money to pay off debt.
Think about it like this, if your investments are earning 10% each year, but you are paying 19% in credit card interest, then you are still losing 9%. The better decision would be to take all that money and get out of debt as fast as possible. Then, when it’s all paid off, put all the money you used to spend on debt towards investments.
Now, let me be clear, I am not saying you should pull money out of investments. Rather, stop contributing to your investments until you are out of debt.
19. Start Couponing
If you learn to coupon like a boss, you could save money on groceries, gas, clothes, prescriptions, and much much more. And, whenever you find ways to spend less money than you originally budgeted for something, you can use the surplus to pay off extra credit card debt.
20. Capitalize On Your Tax Refund
This one is pretty cut and dry. If you receive a tax refund, and you are working on getting out of credit card debt, then every penny of your refund should go toward paying off your debt.
In fact, when my wife and I got out of debt, we actually used our tax refund to pay off our final balance. Once again, every little bit helps!
21. Take Advantage Of Any Work Bonuses
Work bonuses are like pennies from heaven when you are trying to pay off debt. So, if you receive an end of year bonus, or a bonus for hitting a certain sales goal, then use that money wisely and put it towards your credit card debt.
Sure, it might seem like more fun to take a family vacation, or buy something expensive, but in the long run, you will be much happier if you used it to eliminate the burden of credit card debt.
So, what are some of the tactics you have used to pay off credit card debt fast? We want to hear about them in the comments below.
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