Nationally, credit card balances are on the rise with 49% of cardholders carrying month-to-month balances as of November 2023, up 10% from 2021. Adding to that, credit card interest rates are still high (24.59% as of January 2024, according to LendingTree), making it harder to pay down debt.
But making late or no payments to your lenders will end you up with delinquent accounts and on the calling list of creditors. To meet this head on, it’s time to make a plan.
As we tread further into 2024, here are some ways you can help yourself pay down your debt:
Go over your expenses
Knowing where your money goes each month is the first step to getting your finances in order. From there, you can decide how much money you have left over each month to pay down your credit cards—and where you can cut back.
Try an expert-recommended repayment method
If you’re looking for a plan to help you pay down debt, try the debt avalanche or the debt snowball. With the avalanche method, you pay minimum payments on all your cards, with the remaining funds (typically, this should be a higher amount) going toward the card with the highest interest rate. Once it’s paid off, you go to the next highest and so on. The snowball method is similar except you designate remaining funds to the card with the lowest balance, and so on.
Try using more than one account
One method to help you budget better so you don’t use your credit cards while you’re working on paying them down is having multiple accounts. One account is for your bills and household expenses and another is for fun things like shopping or going to the movies.
Look for a 0% introductory rate
If you’re trying to pay off your cards and you still have a decent credit score (typically 700 and above), try transferring your balance to a credit card offering 0% introductory rates, which often run up to 21 months.
Enroll in a debt management plan
By making an appointment with a credit counselor, you can get help with budgeting and deciding how to tackle debt. This may include a debt management program, which is where your counselor will talk to your lenders to get your interest rate reduced and your credit cards consolidated into one monthly payment, so you can pay off your debt with a solid plan in place.
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