Despite the abundance of guides and courses littered across the Net that are willing to tell you how to pay off credit cards fast, for a fee, of course, the best thing you can do to get out of debt is to stop spending money.
So, put your card away, and read through the following tips to learn the best way to pay off credit cards:
- Track your monthly expenses to find out where your money is going. Regardless of the type of debt you’re trying to pay off, the first step to financial freedom is figuring out where you’re actually spending all of your money – you’ll be surprised at the amount of frivolous things you’re buying once you actually see your purchases written down on paper. Ideally, you should track your spending habits for at least a month.
- Create a plan and write it down. Sticking to a debt payoff plan is hard enough, and the worst thing you can do is try to keep track of it in your head. Instead, take some time and write down the steps that you want to take. For instance, now that you know what you’re buying, write down where you can eliminate unnecessary spending, like fast food and movies, and list out your debt according to priority. Make sure you keep your written debt payoff plan where it’s easily visible so you can look at it when you need motivation to keep going.
- Make sure you have an emergency stash before you start. Before you start trying to pay off your outstanding debt in large amounts, you should always make sure that you have some money to fall back on in case of an emergency. In most cases, $1000 is a good goal to shoot for; however, it depends on how many people are in your household. Of course, this doesn’t mean you should skip any payments while you’re creating an emergency fund – otherwise, you’ll just fall further behind. However, it’s okay to pay the minimum payment while you’re creating your cushion.
- Start with the small debts first. The biggest reason most people fail to accomplish the debt payoff plan they create is because they lose the motivation to keep going – especially if they aren’t seeing any progress. In an effort to combat this, make sure you’re paying off some of the smaller bills first so that you can see your debt actually start to disappear. There’s nothing more disheartening when you’re trying to pay off credit cards fast than feeling like you’re just throwing money at an impossible debt that doesn’t appear to budge.
- Stick with it. In addition to starting off with reasonable goals, sticking with the plan you choose is truly the best way to stop debt from piling up. The only way that you’ll accomplish paying off your loans and lines of credit is by continually moving forward.
When you’re looking for the best way to pay off credit cards, it’s very important to avoid falling back in to the trap of paying for unnecessary expenses with a credit line. Additionally, if you’re planning on shifting debt by taking out a loan to pay off credit cards, make sure that you have a plan in place to pay off the new loan, as well. The worst thing you can do when you’re trying to consolidate your credit card debt into a single loan is to neglect reading the terms of the new loan. If you aren’t careful, you may end up finding yourself locked into a loan that has a higher interest rate and a balloon payment a few years down the road.