Credit card debt can keep accumulating and land you in a circle of endless debt before you know it. It can also affect your credit score, bringing it down significantly. If you have credit card debt, working on cutting it down is the best way to keep yourself out of impending financial troubles. Here are seven simple yet effective tips on how to cut credit card debt.
Pay more than the minimum amount
If you’re wondering how to cut credit card debt, you can start by paying more than the minimum amount due every month. This is, in fact, the smart thing to do for every credit card holder. Paying more than the minimum amount helps reduce interest and can go a long way in helping you cut down the debt.
Use the snowball and avalanche methods
There are two effective strategies you can consider to repay debts if you have more than one card and a lot of debt. The snowball strategy calls for you to make the minimum payment for all the cards and clear the balance on the card having the lowest dues. You will have one less card to pay for the next month, and you can continue this until you clear off the dues on all your cards.
The avalanche method suggests you to pay off the card with the highest interest rate, without worrying about the balance due. You can do the same for the card with the next highest interest rate the next month, and so on until you’re out of debt.
Stop using the cards
A simple way to cut credit card debt is to stop adding to it. Stop using the cards and keep them locked to ensure that your debt doesn’t rise. This prevents you from impulse spending and accumulating more debt.
Cut down on your expenses
Cut your expenses and avoid luxuries until you clear your debt
- Look for bargains and deals when you shop
- Avoid going to the movies and restaurants and have homecooked meals
- Cut your cable TV bill and watch content on the web.
Get a balance transfer card
These cards offer zero interest on transferred balances, which can help you cut down on the payments toward interest rates. However, you need good credit to be eligible for a balance transfer.
Make a budget and stick to it
Make a budget and strictly follow it unc=til you’re out of debt. This will help you manage your expenses and divert more money to clear off your debt. Preparing a budget will also help you identify non-essential expenses that you can cut.
If you’re wondering how to cut credit card debt, following these useful and effective tips can help you along the way.