Credit card debt is one of the worst thing that destroys your budget. When you are in debt it is very difficult to maintain a stable budget and save something. If you want to have financial stability then the first thing you need to do is to get rid of your debt. Although the mortgage debt take some time but you can get rid of your consumer debt in a year or two. One of the main consumer debt is credit card debt and it is sometimes difficult to control it. If you are also the one who have credit card debt then know that according to a Bankrate an average household has over $15,000 of credit card debt and you have to pay 16% interest rate on average. One of the worst thing is that if you pay the minimum price then you cannot get rid of this debt in the next 20 years. But don’t worry, today I am writing this article to give you some of the best ideas so that you can get rid of your credit card debt in the fastest time.
Going debt free is a very important thing for you and your financial future. You can live the life you want without worrying about money all the time if you are debt. After you lose your debt, you have a different perspective of saving money and you can spend freely. You can have an emergency fund and enough money to go to vacations and tours.
One thing that you need to make clear in your mind is that you should know why you want to lose debt. You need to answer yourself clearly so that you can keep yourself motivated on this path. Your answer could be different from anyone else. You could have your own reasons but you need to be very clear. When you made this clear to you write down all the reason on a piece of paper and paste it somewhere where you can see it. So that whenever you come across that piece of paper it could keep you motivated. Now you know why you want to get debt free let’s find out how you can do it easily.
1- Debt Snowball Method
One of the famous method to get rid of consumer debt is Debt Snowball Method. This is one of the methods that keeps you motivated and you see the results in a very short time. This is how it works, first you have to write down all the consumer debts. Suppose you have a debt of $500 on you VISA card, $1000 on you Master card and $1500 is some other debt you have to pay. Now you will write down all the debts from the lowest to the highest order. After that you will have to write down the minimum payments that you can pay for the debt in a month. Now this is how this method works, you will have to pay the highest possible amount for the lowest debt and the minimum amount for the others. All your unexpected income should go in paying the smallest debt. After you are done with your first debt move to second debt in the same way and add the amount you pay for the previous debt in this. Now you will be paying the maximum amount for this debt while for the other remaining debts you will pay the lowest.
This methods has many benefits as you see quick results that keeps you motivated although you would be thinking that if we pay the highest debt first it could save us money but that road is long and it will test your patience to the maximum. Thus this method is suggested by most of the finance experts for paying off debt.
2- Get an Extra Source of Income
If you have a single source of income then it would be very difficult for you to pay for the debt and to make a living at the same time. To pay off the debt quickly, you will have to make some sacrifices and this is one of them. If you have a little bit of extra time then you should try to look for a side hustle through which you can bring in some extra cash. This is one of the methods through which many of people have paid off their debt quickly. You can work as a pizza delivery boy, sell your extra stuff, freelancing or even a second job. There are hundreds of option available for you if you want to do a side hustle to make some extra cash.
If you can work overtime in your company then try to do that because this is much simpler then the side hustle as you would not have to change your routine. Other than that you can start a small business or can do freelancing in the field you can. Like you can do graphic designing, content writing or some story writing, you can check out our list of side hustles, which also go into detail how you can earn money on the side.
To know what side hustle you can do, make a list of the things that you can do and select the one which is much more suitable. For example if you are good at a particular subject or language teach that language or subject to someone. You can teach someone online or in person. If you have a specific technical work skill then do that but make sure that you put all this extra income to lose your debt.
By this simple method you will be paying more than you were paying in the past and you will be able to lost debt in a very little time.
3- Live a Frugal People
Frugal people are one the happiest people because they live a very simple life. If you want to pay off your debt quickly then become a frugal person, adopt habits of frugal people. This will help you to pay off your debt quickly. When you will live a frugal life, you will be able to cut off on most of your expense. Most frugal fans also love a good freebie.
There are many ways of cutting off your expenses. For example, you can find cheap and free sources of entertainment by this you will be able to save on your entertainment budget. You can save on grocery shopping by using online saving apps and coupons. You can cancel those subscriptions that you do not use like gym and you can replace cable TV with cheap alternatives like YouTube and Netflix.
By this simple trimming of your expense you will be able to save a good amount of money that you can use to pay off your debt.
4- Debt Avalanche Method
As we earlier talked about the Debt Snowball Method. Now let us talk about the other method that is Debt Avalanche method. This method is very different from debt snowball method and I will only recommend this method if you are the one who does not deviates from the path unless how hard it could be. In debt avalanche method you pay the debt first which has the highest interest rate. By this you save a good amount of money. In this method, you will have to wait for a time to see some positive results but in the end this method can help you save some money as you are paying for the highest interest rate first. By paying the highest payment to the highest interest rate holder you are reducing the amount of interest every month.
Thus if you have a calm mind then try debt avalanche method instead of debt snowball method.
5- Refinance High Interest Debt
If you can lower the interest rate you are paying to the credit card, you can reduce the amount of money you owe to them. This is a very simple trick that you can do to reduce the amount of money that you have to pay to them. There are many online companies that can help you to get a lower interest. For example there is a company named as SoFi, They will pay your credit card debt and then you will have to pay them on a lower interest rate. SoFi has an interest rate as low as 5.99%. This is one of the lowest interest rate that you can get. If your credit card is not approved by SoFi, then you can try another option that is Credible. On this site you will have to pay a bit higher interest rate than of SoFi. Although this interest rate will be much less than the one you are currently paying. This is one of the simplest method that can help you to reduce your debt.
So these were some of the simple tips that you can use to pay off your debt quickly. You should set goals for yourself so that it could keep you motivated and the faster you will be able to lose the credit card debt, the more time you will have for your next goal. Do comment in the comment section below and also share how difficult it was for you to lose your credit card debt. Have a good day!