With so many different opinions circling the internet these days, it can be a bit confusing to know the easiest and fastest ways to pay off your credit card debt. If you’re juggling multiple cards, the confusion can run rampant.
Which debt-repayment method is right for me?
Which card do I focus on paying off first?
Should I do a balance transfer?
Is debt consolidation the best option?
There are so many questions you might be asking yourself on which is the easiest way to go about paying off your credit card debt. I know because I’ve been there, too! The short answer is there’s no effortless way to pay off your credit card debt. However, there are ways to make it a bit simpler of a process and less complicated.
But first, if you want to know the exact steps I took to pay off ALL of our credit card debt (which totaled over $25,000!) in just 11 months, you should check out The Busy Girl’s Guide: 6 Simple Steps To Pay Off Debt.
Alright, let’s look at some of the fastest and easiest ways to pay off your credit card debt.
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Focus On Just One Card First
I have found that by focusing all my efforts on paying off just one card first while making the minimum payments on all the rest of my cards, is the easiest and most rewarding. For me, I choose to focus on the smallest balance first and work my way up to the largest (the snowball method). The reasoning for this is that you can achieve a “win” quickly by paying a card off in full, then move on to the next lowest balance.
The avalanche method (paying off the balance with the highest interest rate first) is another way to go about focusing on just one card first. There is no wrong method to choose here. Choose the method that will work best for you in your financial situation. In my experience, the snowball method provides a huge confidence boost, resulting in a greater chance of you sticking to your goal.
You can see which method will work best for your financial situation by using a free snowball vs. avalanche calculator.
Ask Lenders For A Lower Interest Rate
I’m going to warn you, this can be a hit or miss approach. Before paying off our Capital One credit cards, we called and asked them to lower our interest rates. It was a whopping 25%! Capital One denied our request without budging even a little bit. #rude.
However, I have heard many success stories of lower interest rates being granted to others. If your credit score has improved since you’ve gotten that card or you’ve never missed a payment, you may be in luck. Don’t count on the credit card company to offer a lower rate, though. You’ve got to put in the work and ask for it yourself.
You can try to use a dialogue along these lines:
YOU: Hi, my name is ___________, and I’ve been a loyal (name of credit card company) card holder for (X amount) of years. I would love to keep doing business with (name of credit card company), but my APR seems a bit high. I’d like to speak to a representative that will be able to assist me with this. Do you have authority?
Customer Service Rep: No.
If the Customer Service Representative says that they can assist you, great! Continue speaking with them about lowering your rate. If at any point they say that they cannot lower your rate, ask to speak to a supervisor.
YOU: OK, no problem. May I please speak with a supervisor, in that case?
*cue the elevator music*
Supervisor: Hello, this is (he/she will state their name).
YOU: Hi, (name of supervisor). My name is _________ and I would like to speak to you about lowering my interest rate. Here’s why I believe it should be lowered: (from here, lay out your reasons. You’ve never missed a payment, you’ve been a great customer, your credit score has increased, etc…) I’d like to continue doing business with (name of credit card company) and would like a rate closer to 10 percent.
This is what I mean by hit and miss. From this point, your conversation can go a couple different ways. If they approve your request, AMAZING! Ask for a confirmation letter or email and wrap up the conversation. If your request is denied, poke a bit further.
YOU: Is there a lower rate that you can offer me? Again, I sincerely want to keep my relationship with (name of credit card company) and hope there is something you can offer.
Supervisor: Let me see what I can do for you (cue more elevator music). Thanks for holding. I can go ahead and offer you an APR of 12.5 percent for the next (x number) of months.
Accept the negotiated amount, ask for a confirmation of the new rate in writing, and do a happy dance! If the credit card company still refuses to lower your APR, you’ll need to be prepared to make the decision that’s best for your financial situation: either cancel your account with the said company or accept defeat and promise yourself, on principle, to never use that card again. Jerks!
Pay More Than Just The Minimum
Always try to pay more than just the minimum on your credit cards. Even if it’s just $10 more per month. Credit card companies incentivize consumers by offering low minimum payments on each monthly statement. You justify your purchases because you think to yourself “I can afford that minimum payment” when in reality, you are hurting your bank account. Like, really badly.
Check out this screenshot from one of my past credit card statements:
At the time, my balance on this card was $5,791.00 and my minimum payment was $149.00. As you can see, if I were to just pay the minimum payment on this card it would take me 20 years to pay off! Yeah, no thank you!
The 3 most important reasons to pay more than just the minimum include:
- Save money on interest
- Pay off the balance sooner
- Improve your credit score
Create A Budget
You can’t ever expect to get your finances in check if you don’t have a budget in place. Creating a budget that you can stick to is not only beneficial to your financial well-being, but it will aid in helping you pay off your credit card debt too!
I have been using the envelope system with huge success! It has helped me become credit card debt-free in just 11 months. If you’re not sure where to start with a budget, give the envelope system a try.
A budget is kind of like common sense: Everybody needs it, but not very many people use it.
Cut Your Expenses
Cutting your expenses each month is a great way to pay down your credit card debt.
Have you ever taken a look at your monthly spending? I am 100% positive that there is at least one thing that you can eliminate completely from your monthly budget. Take some time to sit down and look at your spending. What expenses (notice plural) can you do without each month? Take that amount and apply it as an extra payment to your credit card debt each month.
A few ideas for cutting your expenses each month:
- Ditch your cable. With Netflix and Hulu you have so many options on what you can watch (hello Friends and Seinfeld marathons!)
- After ditching your cable, try a digital antenna! This will allow you to watch local channels for free (is there a better price than that?) and even receive full HD channels like ABC, CBS, NBC, and more!
- Use a programmable thermostat to lower your utility bills. There’s no need to have your AC running when you’re at work and with a programmable thermostat, you control the exact temperature for different times of the day. Set it and forget it and feel at ease knowing your money isn’t being wasted. You can easily find a programmable thermostat for under $50!
- Cook at home instead of dining out so often.
- Cancel any unused memberships or subscriptions
Cut Up Your Credit Cards
Since you’re already in the process of cutting expenses, go ahead and cut up those credit cards too! I hear from a lot of people who feel extremely uncomfortable taking this step. Their reasoning? It’s their security blanket. What if something comes up? What if an emergency arises? Well, friend, I’ve got some tough love for you:
A credit card is not your emergency fund!
It is going to be extremely hard to get out of credit card debt when you believe that credit cards are your ‘in case of emergency, break glass‘. If you haven’t already, save up a starter emergency fund of $1,000. Once you have your starter emergency fund in place, cut up those credit cards. $1,000 is your new emergency fund, not your credit cards.
If you want to save $1,000 fast, you can download the savings guide located in my Free Resource Library. Simply enter your email to receive the password instantly.
The Hardest Way To Pay Off Credit Card Debt?
The hardest way to pay off credit card debt is to ignore any of the above strategies.
After all, “If you do what you’ve always done you’ll get what you’ve always gotten.” ~ Jessie Potter
It’s really as simple as that, amigo.
At Long Last
Paying off credit card debt can be as simple or as difficult as you want to make it. Of course, it will take sacrifice but in the end, it boils down to simple and easy to implement practices that add up to big results. Don’t deprive yourself of living a life free of credit card debt simply because you’re not wanting to put in the effort to dig yourself out. By using the strategies outlined in this post, paying off your credit card debt can become a thing of the past. What can you do each month with the total amount of money you’re paying in credit card debt? Probably a lot more than you’re doing right now, I bet. That reason alone should be enough for anyone to want to get rid of their credit card debt once and for all.
Until next time, guys!
What fast and simple strategies have YOU used to pay off your credit card debt? Let me know in the comments!