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Credit card payments are quite valuable in keeping your personal finances in good condition. Sometimes, people who are buried in debt only have to manage credit card debt to keep it from totally ruining their personal wealth. Why the special treatment on credit cards?
Well first, it is the easiest debt to get into. The allure of being able to buy things that you cannot afford at the moment is just too hard to pass up on. Secondly, the high-interest rate on the credit card can quickly grow your debt into unmanageable proportions. Third, it does not have many restrictions on your credit as long as you have not reached the credit limit. And when you have reached the limit, you can expect that things will be very tough to get over.
The problem for some people is they remain oblivious to the amount of debt that they incurred. The convenience that it brings can be a double-edged sword. If you can relate to this, you have to act fast to keep credit cards from ruining your life. Of course, that means you have to do something about your credit card payments.
How to boost the monthly payments on your credit card
It is not enough that you stick to the minimum requirement for your monthly credit card payments. This is a trap that will keep you in debt for a very long time. If you really want to solve your credit problems, you must implement certain financial habits that will help you boost the monthly contributions on your credit card balance.
Here are some tips that we suggest you look into.
Know your options.
First and foremost, you have to know the different ways you can get out of your credit card troubles. All debt relief programs are applicable to credit card debt and you cannot say that you do not know what to do. Just like it is your responsibility to pay off your debts, it is also your responsibility to know your options in case your finances can no longer afford your payments.
Create a budget plan.
If you really want to maximize your payments, you must look into your finances first. See how you can squeeze more out of your income. A budget plan will help you determine the maximum amount that you can allot for your credit card payments without compromising the other expenses that you need to spend for.
Track where your money is being spent on.
Take a month or two to list where your money goes to. If you have to carry a small notebook - then do it. Or simply utilize your mobile phone to help you jot down every expense that you make. This will help you filter out any expense that should not have been made or habits that you need to correct. Do this for both cash and credit card purchases.
Maintain your card payments.
Make sure that you can sustain your credit card payments so you can track it accurately. Create a payment plan that will help you monitor it. Find ways to keep yourself motivated - it even helps to watch your balance go down.
Try not to use your credit card for new transactions.
If you really want to pay down your credit card debt, you must keep yourself from incurring more debt. Otherwise, you will never be out of credit obligations.
3 tips to pay off credit card debt
There are many methods that you can use to make sure that you can make better progress at paying your credit card debt. You may want to follow any of these methods to help you achieve debt freedom without compromising your credit score.
Rank your debts according to the highest interest rate.
The first strategy is to rank your debts with the high-interest debt on top. What you will do is to distribute your credit card payments one all of these - starting with the minimum requirement only. Anything that is left will be placed on the topmost debt on your list - which is the one with the highest interest rate. The idea it to concentrate on this debt so you can get out of it faster - while making sure that you do not default on the others.
When you have finished paying this off, you can get the credit card payments from the first debt. You will then transfer everything to the second debt priority - which will grow your monthly payments exponentially. You roll over the payments to the next debt when it is finished. Continue with this until you have paid off all your dues. The goal of this is to start with the high interest so you can limit the money you will waste on them.
Rank your debts according to the lowest balance.
This is very similar to the first in terms of the process. However, instead of prioritizing the high interest, you will be focusing on the debts with the lowest balance. The reason for this is to give the consumer an early success to they get the motivation to continue paying the rest of their credit card accounts. Sometimes, this is more effective than the first in giving consumers debt freedom. However, it does result in increasing the interest amount that you will end up paying for in the long run.
Set up automatic payments.
Lastly, you may want to set up automatic payments that will keep you from forgetting your payments. You can choose the date that you want to send the payment and the amount that you will pay. If anything, this will help you implement your payment plan flawlessly and avoid late penalty charges.
You may find all of the payments quite confusing but there are credit card payment calculators that you can use online. Sites like Bankrate offer various credit card calculators like their credit card payoff calculator that will help you determine when you can completely pay a credit account. Another tool that you may find useful is the credit card minimum payment, calculator. This will tell you how long it takes to finish paying a debt via minimum payments as opposed to paying more than the minimum requirement.