Five Ways You Can Pay Off Your Credit Card by 2020

Credit card debt — most of us have it to some extent, while many others are deep in it. Yet for many Americans, trying to get out of credit card debt isn’t something that seems feasible. The reason credit cards are so attractive is that they allow you to shop and pay later, but the high interest rates that most people aren’t aware of when the sign up for a card can come back to bite. Americans collectively have an excess of $1 trillion in credit card debt and the truth is, for most people the road to liberation is long, difficult, and extremely overwhelming.

The good news is that there are plenty of ways to dig yourself out of credit card debt. The road there won’t be easy; in fact, you’re going to have to put in a lot of time and energy to get out, and even more to make sure it doesn’t happen again. But it is possible! The following five tips can help you if you would like to pay off your credit cards by 2020.

1. Make More than the minimum payment. Most people choose to make only the minimum payment on their credit card. The problem with this is that some credit card companies know this and will increase your interest, therefore increasing the principal amount over time. If you would like to get rid of credit card debt, you have to adopt the practice of either paying off the full balance or a little more than the minimum payment required. This strategy will definitely work for you if you don’t have too many bills to pay. But if you have more than one credit card, choose one or two to pay the full amount and pay the minimum on the remaining ones. That way you can feel a sense of accomplishment when you get through one credit card before tackling the next.

2. Stop Using the Card. This one is fairly obvious, but sometimes it bears some emphasis! If you have accumulated a lot of debt on one credit card, the best thing to do is to stop using the card altogether until you can pay it off. It would be a good idea to keep the card only for emergencies. Tuck it into the back of your wallet and make yourself forget about it so that you’re never tempted to use it when you’re out and about.

3. Create and Stick to a Budget. If you cannot use your credit card for emergencies only and need to use it to pay bills and for other expenses, then the best way to keep the debt from piling up while you pay it off is to make a budget and stick to it. Determine how much you are willing to spend on certain bills and purchases and spend only that. And we mean it that you should really stick to it! Your budget should be proportional to your income or you’d find yourself in debt again. Small tip: The biggest unnecessary expense for most people is eating out, so plan ahead, buy your groceries at the beginning of the week, and meal prep so that you won’t be tempted to grab a burger on your way home from work.

4. Negotiate a Lower Interest Nate. Most people never look at the interest rate attached to the credit card when signing up, and credit card companies will intentionally keep this information from you if they can. What most people don’t know is that you can negotiate for a lower interest rate. Call the credit card company to see if they are willing to lower your rate and they might have a pleasant surprise for you. The worst that can happen is that they say no, but at least you can try!

5. Transfer to a 0% APR Balance Card. You can also choose to transfer your card’s balance to a 0% APR balance card. Most balance card will offer 0% for an introductory period (usually about 15 months). You can use this time to clear as much of the credit as you can without the burden of an imposing interest rate. You may have to pay a balance transfer fee of about 3%, but it may well be worth it if you use the time to clear the credit. 

Just about everyone you know has probably dealt with credit card debt at one time or another during their life. Many people find the stress of budgeting and saving too overwhelming, which leads to more and more problems in their lives. “When will I get my tax refund?” should not be the question lingering in your mind when you’re racking up more and more debt! Temporarily relief won’t help you to never get into debt again. If you apply the tips listed above, however, you can enter 2020 debt-free and with some new budgeting skills under your belt. Happy saving and good luck!

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