How to Pay Off Credit Card Debt

If you have credit card debt, carry high balances, it may feel insurmountable. Rather than let credit card balances hold you back, lets take a look at some of the most effective ways you can pay off your credit card debt fast.

A debt consolidation refinance is one way to consolidate all your debt quickly and save 100’s and maybe even 1,000’s each month.

Now let’s take a look at some other means to eliminate what can seem like an insurmountable task:

Start with one debt at a timepexels-pixabay-50987

Whether you have two credit card balances or 12, it’s helpful to take a structured approach to paying off your debt. The goal throughout this process is to make the entire process simple and more manageable by aggressively focusing on one debt at a time,

Debt snowball method

With the debt snowball method, you focus on paying off your smallest debt first. Then, after that one’s eliminated, you take that freed up payment and move on to your next-smallest balance by applying the previous payment to the next payment until that’s paid off and continue this process until you’ve paid off all your balances.

Let’s say you have $250 to contribute toward this snowball method, and you have three credit card balances with a total minimum monthly payment of $200. Initially, you’ll put that extra $50 toward the credit card with the smallest outstanding balance, and you’ll make only the minimum required payment on the other two.

eventually, that credit card will be paid off. You’ll then take the funds you were contributing toward that balance and add it to the minimum payment for the next-smallest balance. Repeat this until the last balance has been completely paid off.

The drawback to the debt snowball method is you pay more in interest over time. It can also take longer to repay your debts this way and this is another reason to perhaps do a debt consolidation refinance to eliminate all your debt at once and save on that interest that would be paid over the duration of time it would take to wipe everything out. Call me at 303.634.2271 or email me at tbowen@5280financialgroup.com and we can go over all your options to see what would be best for you and your situation.

Debt avalanche method

The debt avalanche method focuses on the credit card balance with the highest interest rate first. This method is designed to save as much interest charges as possible.

With the same three balances as before, this approach focuses on the card with the highest APR. You will still make minimum monthly payments on cards one and two, but you’d apply the extra $50 toward card three until it’s paid off.

The biggest downside to the debt avalanche method is that it may take you longer to start eliminating account balances.

Debt can weigh on you heavily but there are ways to eliminate it as shown above. Call me today and ill spend as much time as needed to go over all your options that will help you get ride of your debt and start your 2022 off on a solid mental and monetary foundation. Call today: 303.634.2271 or email me at: tboween@5280financialgroup.com