Pay off debt: Find the best ways on how to pay off debt

Pay off debt: Best ways on how to pay off debt

Struggling with several debts, can put the calmest persons stress levels into overdrive. When trying to pay off credit card debt, it’s important to create a strategic plan on how to effectively pay it off. When trying to pay your bills, it’s important to try and make the payments you do make go toward your actual balance, as opposed to interest rates and other forms of fees. In order to do this, consumers must make some sort of plan to pay off the credit card debt owed. When a strategic plan is created in addition to a budget, consumers will have a better idea on how to pay off debt.

When researching the best ways on how to pay back debt, consumers should always start with their finances. It's important to try and eliminate expenses that are not needed in everyday life to ensure that you have the most funds available to apply more than just the minimum payment. So that we can break the ice on the subject, let’s get into the first thing all consumers must do.

3 Steps on how to pay off debt

Step # 1: Create a budget
Creating a budget is vital when wanting to pay off debt. When a budget is not in place, you’ll have no idea how much money is being brought in as opposed to how much money is being spent each month. A budget is vital tool for any consumer before making plans on future or current debt. Similar to an owner’s manual to anything you would buy in a typical store, a budget will give you detailed instructions on what you do and do not have.

After the budget is done, whatever is left over should be applied towards the creditor with the highest balance, not the one with the largest interest rate. If after the budget is complete you feel like no additional funds are remaining; try to find expenses in that budget that you can eliminate. For example; premium channels in a satellite bill will be able to help free up money. Similarities such as cellular phones, or fast food is not a necessity in order to survive. By eliminating such things, consumers will be able to free up money and apply more than the minimum payment each month when the bills are due.

Step # 2: Create a plan
Once you’ve found out what your monthly income and expenses are, it’s important to lay out all the creditors you owe. When this is done, list the creditors by balance owed alongside the interest rate. Now when this has been done, you would think that the smallest credit card would be the ideal one to pay off. Incorrect, when creating a plan to pay off debt, it’s important to target the creditor with the highest balance and highest interest rate. Pay just the minimum required payments on all the smaller cards, and pay the absolute most that you can on just this one creditor. When learning how to pay off debt, this would be the ideal method to effectively targeting a credit card payoff.

Step # 3: Snowball your payments
When you’ve paid off your largest balance, work on the second largest. Continue to pay just the minimum required payments on the smaller ones, but get the payments you were paying on your first credit card and apply it to this second one. Each month, your payments you make should get bigger and bigger as creditors tend to fall off the list. When you pay off credit card debt and do it without the use of a third party company, this tends to be the ideal method to get it done.

2 tips for when you pay off debt

Tip # 1:  Shred the credit cards
Although it may seem hard to do, shredding the cards is extremely important. What good is the above 3 steps if you successfully pay off a card only to have a holiday come around and you go and run up a new balance? Most consumers come within ninety percent of the allowed credit limit in the first 30 days of having the card in their possession. It’s important to shred the cards to ensure that future temptation is avoided. This is an excellent tip and is a must when you pay off your credit card bills.

Tip # 2:  Stay away from future debt.
Let us never forget, credit card debt gives consumers an illusion of having money that never once existed. When walking into the retail stores, temptations of zero percent offers or pay nothing until a certain month is becoming too common. If consumers stayed away from these offers, how to pay off debt wouldn't be on our minds. 

It’s important to learn from our mistakes, and stay away from future credit in general. Always try to live a cash only life. When that isn’t possible, it’s extremely important to try and be careful.  When you pay off debt on your own, it’s always a good idea to follow the above three steps. When this cannot be done, finding credit card debt help through credit counseling is the next best step to lower interest rates.

paying off credit card debt




A video on how to pay off debt:

paying off debt and the bbb


2 tips on how to pay off debt

  • APR's to high?
  • Balances not moving?
  • Creditors not helping you?
  • Falling behind to frequently?
  • Minimums not going down?
  • Struggling to stay current?


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