Credit card debt and clearing your balance can be bothersome for most people. Having a plan or method to repay your debt, and reduce interest charges will allow you to manage your expenses more effectively. Here’s how to pay off your credit cards sooner, reduce your worries, and save money.
To ensure you pay on or before the due date, always check your credit card statement. Do this to avoid paying late fees or extra interest, and keep your credit score healthy.
Automatic transfer from your bank account or by direct debit is an easy way to do monthly payments. Set your debits for the day when your paycheck comes in, so you have enough funds to cover the payment. It’s better to also set up a payment reminder in your calendar.
Pay more than the minimum
Pay off the debt sooner and save money by making higher repayments each month. You’ll pay lots of interest if you only do the minimum. It won’t necessarily reduce your credit card debt, and will take years to pay it in full.
Talk to a free financial counsellor by contacting your bank or credit provider right away if you’re experiencing temporary hardship in repayment. They might allow you to renegotiate your payment terms. Taking early action stops a small money problem from snowballing.
Lower your credit limit
Lowered credit limit means you can practice discipline over your spending. Ask your credit provider to decrease your credit card limit to avoid the temptation of overspending on your card.
Reduce the number of your credit cards
Cut down on your credit cards if you have more than one. Pay off one card at a time by trying either of these:
- Smallest debt — pay off the card with the smallest debt first, then move onto the next-smallest one until you finished them all.
- Highest interest rate — start taking down with the one with the highest interest rate, then pay off your other cards one by one.
You can then cancel each credit card after you’ve paid it off to avoid further charges. Maintain only one card, and try to use it just for emergencies.
Keep track of your spending
Keeping track of what comes in and goes out of your wallet will make you assume control of your debt. It’s easier to keep up with credit card payments and bills once you know what you’re spending.
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