The fastest and cheapest way to pay off your credit card debt
It is recommended that you pay off the full amount borrowed within the deadline set by the bank. This, however, is not always possible. So not so small interest rate starts applying on the remaining amount. Here is what you can do if you are ever in such a situation:
1. Stay away from your credit card and save up more
The first step to paying off your credit card debt is to stop adding to your balance. Maybe the best idea would be to leave your card at home or maybe even cancel it. Also, think about how you can scale back your spending and save up a bit. For example, instead of going out for lunch with your colleagues every day, try to bring your own food from home.
2. Increase your monthly payments or invest
After you have saved up a bit, you have 2 choices. You can increase your monthly payments or think about different short-term investments. These investments, however, will only be worth pursuing if they could earn a bigger interest rate than the one you are paying. This way you could pay up your credit card debt faster.
3. Consider another loan type
The credit card is short term financing which is used mainly for online purchases, for more security or when traveling abroad. If, however, you need more funds or cash – then you should consider a different option. One option is to apply for a cash consumer loan or for a mortgage (if you need more funds and you can provide collateral) and use part of the loan to cover your credit card debt.
4. Refinance all your debt
Another suitable option is to refinance all your obligations. Especially, if you already have several loans and you find it difficult to track all payments. Refinancing will also give you the opportunity to negotiate better terms of the loan such as the interest rate and the maturity period.