Continuing from 6 Tips That Can Help You Pay Off Credit Card Debt (Pt. 1), below are some additional helpful tips that borrowers should keep in mind when they are ready to focus on paying off their credit card debt.
Tip 3: Limit or suspend your use of your credit cards.
Paying more than the minimum payment on your credit card debt will only be an effective way of working towards paying off a line of credit if you are not continuing to use the card (and charge more than you are paying) on a monthly basis. If you rely on your credit cards to pay for your day-to-day needs, consider:
- Leaving your credit cards at home.
- Using cash to pay for your daily necessities.
While using cash to pay for your day-to-day needs can help you stop accumulating charges on your credit cards, it may actually end up helping you spend less overall, as researchers have found that people tend to spend less money when they use cash for payment (because cash generally makes them more aware of the amount they are spending and, consequently, more discerning about when they spend money/what they end up purchasing).
Tip 4: Transfer the balance of some cards onto others with lower interest rates.
In some cases, completing a balance transfer to move some or all of the balance from one credit card to another can be an effective way to consolidate your debt and reduce your overall payments. The key here is to focus on moving debt from credit cards that have high interest rates to cards that have no or minimal interest rates.
It’s important to point out here, however, that you need to read about the potential charges that credit card companies may levy for balance transfers before you take this action. While some credit card companies may allow you to transfer a balance from another card once for free, others may charge you a rate based on the amount of the balance you are transferring (e.g., 10 percent of the balance transferred), which may end up negating the benefits of this move.
Don’t miss the conclusion to this three-part blog for some final tips that can be helpful when it comes to paying off credit card debt.
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