How to Pay off Credit Card Debt Fast!
Are you paying high interest rates on your credit card debt? Are you falling behind in payments? Is your credit card debt getting out of control?
The economy has taken a toll on us all. The recession caused a loss of nearly 8.8 million jobs between 2008 and 2010, and we have only recovered about 6.2 million of those jobs. In addition, Americans who have recovered a job are getting paid less. It’s no wonder that “the average American is $46,000 in debt” and 24 percent of Americans owe more money in credit card debt than they have in their savings account. The good news is that the economy is recovering, as evidenced in the increase in home values and corporate profits. These statistics, combined with the fact that Americans are feeling more secure in their jobs, makes it a great time to pay off credit card debt fast and get in a better financial state.
In this article, you will learn how to pay off credit card debt fast with a Credit Counseling Program that could help lower your interest rates and consolidate debt into one monthly payment. Or, if you are current on your accounts and have acceptable interest rates, we have some ideas on how to pay those credit cards down faster, reducing the total interest paid over the life of the debt. Finally, if you are behind in payments and have accounts already in collection, you will learn how you can reduce your balances considerably with Debt Settlement. There are examples of each of the three options for paying off credit card debt fast, as well as the effects that each debt relief option can have on your credit.
For more information, see the How to Pay off Credit Card Debt Fast Slide Show by clicking the images below or by viewing the Slide Show on the top of this page.
Pay off Credit Card Debt with Consumer Credit
In a Consumer Credit Counseling program a professional Credit Counselor will negotiate with all of your creditors for a lower interest rate and devise a repayment plan that is affordable. Your debt will be consolidated into one monthly payment, allowing you to pay a reduced amount than if you were to continue making payments at the higher interest rates. Consumer Credit Counseling has less initial negative impact on credit, when compared to debt settlement. However it is reported to the credit reporting agency that you have joined a Consumer Credit Counseling Agency and a mark does appear on your credit report illustrating that. It typically takes about five years to graduate from a Consumer Credit Counseling program.
Example of a Consumer Credit Counseling Program:
- $50,000 is the total debt.
- Monthly payment of $1,100 per month. (roughly the same as when a person pays minimum payments, but less interest)
- Be debt free in around 5 years.
- Pay back an estimated amount of $66,000.
How to Pay off Credit Card Debt Fast When Current
In the current economic situation, many Americans are falling behind in credit card payments. In addition, many are wary about paying anything more than minimum payments, for fear of job loss or other emergency. Paying only the minimum payments on credit cards can make the situation worse. If you add late fees to that equation, you can really get into some trouble. Here is an example of how much more you would pay just making minimum payments on your credit card debt:
Example of how much you would pay in Interest, when Paying Minimum Payments
- $50,000 (total debt) with 15% interest.
- $1,100 total each month on average is what you would be paying when paying minimum payments.
- It would take 143 months or around 11 years to become debt free at this rate.
- You would end up paying back $157,300 (of that, $107,300 would be interest)
It does not make sense at all when you look at the numbers. So how then can you pay off credit card debt faster and keep the total payoff to a minimum? In the best case scenario, you are current in payments and you are able to pay higher than the minimum payments on your debt. If this is the case, then below you will find five tips to help you pay off credit card debt fast.
5 Tips To Help You Pay Off Credit Card Debt Fast
1. Stop Using Credit Cards
The first step to paying off credit card debt fast is to stop increasing your debt. Don’t use credit until all credit cards reach a zero balance. We don’t recommend cutting them up because of the fact that we do believe in using credit cards to build credit, and not to build debt.
2. Create a budget analysis
Next, create a detailed budget analysis. Organize and record your income and expenses on a sheet of paper or an Excel document. Log the expenses in one column and the income in another column to determine how much money you have left at the end of the month.
Then, evaluate your budget. See if you can find ways to cut expenses to increase the amount of money you have to pay off debt. Perhaps you can lower your cable or phone bills by switching to a lower payment plan. Or lower your food expenses by using coupons or eating in more often? Maybe you need to eliminate certain items all together, such as subscriptions, club memberships, and trips to Starbucks. Find ways to cut your expenses!
3. Pay off cards with higher interest rates first
We recommend that you pay off the credit card with the highest interest rate first. This is the card that is costing you the most money so it makes sense that it would be the first one we would want to attack. With the extra money that you have from cutting your expenses, pay at least double the minimum payment, or as much as you can on top of the minimum payment. You may even consider doing a balance transfer to transfer the balance sitting on a high interest card, to a low interest card.
Some Debt Relief Consultants recommend paying off the card with the lowest balance first which is supposed to motivate you to keep paying down debt. However, this practice actually ends up costing you more in the long run. If you need that momentum, that is fine, but in order to save the most money and payoff balances more quickly, you will have more success paying off higher interest rate cards first. And the more you pay the better! Once you pay off that card, move onto the card with the next highest interest rate and get it paid off, and so on. On the other cards, just continue paying minimum payments until you can attack each card one by one, and become debt free.
4. Make a payment twice a month
Another idea to consider is to make bi-monthly payments towards your debt. Split your credit card payment in half and make a payment every two weeks, rather than once a month. In the months where there are more than four weeks, you will be making extra payments, getting your debt paid off faster.
Finally, celebrate your success! With hard work, comes a great reward! Every time you successfully pay off a credit card, reward yourself with something! Perhaps a celebration includes taking your spouse out to their favorite restaurant, or taking the kids to an amusement park in your area. Sometimes a celebration could include something as easy as going to the movies, getting a massage or treating yourself to that Starbucks you have been going without. Whatever you choose, make it meaningful to encourage you to keep going.
Pay off Credit Card Debt with Debt Settlement
A good candidate for a Debt Settlement Service is one that is in a financial hardship and cannot make even minimum payments on their accounts. For maximum savings, accounts are already in collection. In a Debt Settlement, a Debt Settlement Negotiator will settle one debt at a time; negotiating discounts, as well as lower balances, until the client is debt free. Payments are consolidated into one flexible monthly payment that goes toward all debts. Each program is custom built for the client’s current personal and financial situation, as well as the level of debt.
A Debt Settlement program can help avoid bankruptcy and result in being debt free in approximately three years! You could end up paying significantly less that the total amount owed on each account. You will even receive legal representation; if necessary (this service varies by company).
While paying off debt with Debt Settlement can initially lower a credit score, people can begin to rebuild credit upon graduation. In addition, Debt Settlement programs can have less of a negative impact on credit over the long-term, when compared to bankruptcy. It is important to choose a reputable company in good standing with the Better Business Bureau. Clients have problems with debt settlement when they are not informed and educated enough about how the program works, or if the company does not have the necessary experience, leverage and legal protection for their clients.
Example of a Debt Settlement Plan:
- $50,000 is the total debt.
- Monthly payment of $900 per month.
- Be debt free in around 3 years.
- Pay back an estimated amount of $32,400.
Whichever option you choose; Credit Counseling for lower interest rates and one monthly payment, paying off credit card debt faster when current on accounts, or with Debt Settlement if you are behind in payments, we encourage you to choose one and begin taking steps toward being debt free! We are here to help in any way we can.
Why choose Golden Financial Services?
Golden Financial Services has been in the credit debt relief industry since 2004. We have helped over 1.5 million customers get out of debt with our credit card relief education programs and proven debt relief services. Golden Financial Services has received an A+ Rating with the Better Business Bureau and has zero unresolved customer complaints since 2004.
Golden Financial Services is partnered with over 200 attorneys regulated by the State Bar in 48 states. Our partner skilled lawyers and negotiators have over 12 years of legal experience focusing on different areas of the law. When you choose Golden Financial Services to manage your debt, we will match you with a state attorney to help you handle any legal issues that may arise when dealing with debt.
The firm takes a tremendous amount of pride in supporting the client’s efforts to become debt free. Our goal is to consistently add value to the process and to the client’s experience while in the program. With over 8 years of experience and knowledge, Golden Financial Services is one of the most trusted debt relief companies in the country.
If you feel like you are drowning in credit card debt, Golden Financial Services has the financial education, resources, and credit card debt relief services to settle your debts. We understand that dealing with debt can be overwhelming and that’s why we are here to help.
Take control of your financial future and call Golden Financial Services today at 1-866-376-9846 for more information on our credit card consolidation and debt settlement negotiation programs.