The season of brisk air and fun frights is right around the corner, but what you don’t want haunting you throughout the entire season is your credit card debt—especially with the holidays on the not-so-distant horizon. If you’re looking to pay off your debt this fall, follow these tips to finish the year financially strong.
Keep Your Credit Cards Out of Sight
Paying off debt can seem easier said than done, especially if you’re still using your credit cards. It’s best to put them away, delete your credit card history from online shopping portals, and go cold turkey. Making a budget can help you designate dollars each month to household expenses, credit card repayment, and even some for savings.
Extra Payments Mean Less Interest
You should always pay the minimum payment on your cards each month, but if you’re able to pay extra, you’ll be able to pay off your loans faster. This also helps you save money overall by reducing the impact of accruing interest.
Strategize Your Repayment
Having a game plan can help you pay off your debt more quickly and strategically. Experts often recommend the debt snowball or debt avalanche methods. Both follow a similar strategy with some slight differences.
In the debt snowball, you pay the minimum payment on all your cards except for the card with the smallest balance. On that card, you would pay as much extra as you can until it’s paid off, repeating the process until they’re all paid off.
With the debt avalanche repayment strategy, you would pay the minimum payment on all your cards while paying extra on the card with the highest interest rate, following this pattern until they’re all paid off.
Explore a Debt Management Plan (DMP)
A debt management plan is a program you enroll through a certified credit counseling agency. Once enrolled, a credit counselor will work with your creditors to reduce your interest rate and consolidate your credit cards into a single monthly payment that’s affordable for you. The program is designed so you can pay off your debt in three to five years, making it an efficient and supportive program.
Debt Settlement: Proceed with Caution
If you’re considering a debt settlement program, you should know the risks. They often charge high fees, and they are known for advising clients to stop paying on their credit cards completely while trying to get your lenders to settle. This can lead to late fees and a drop in your credit score. By following the above tips, you can safeguard your credit score while paying off your debt without the negative impacts of debt settlement.
Schedule Today
Knowing your options can help you prepare your finances for the next step, whatever that may be.
Make a FREE online appointment to discuss your options