When you have a lot of credit card debt, it can seem impossible to pay it all back. It just keeps growing. The interest keeps building each month. How do you start paying it off faster? The right tips can help with credit card debt and get you back on track. With the right repayment strategy, you can start paying off your card and living a better life. Here are a few tips to help you get started.
Understanding Interest
Interest is typically applied each month at a rate called an APR, which can be fixed or variable. It looks at how much money you owe, and a percentage of that is added to the account as interest. This is how lenders make their money. You can use a credit card interest calculator to see how much interest you are generating, given your card’s APR, and how you can pay it off faster. The first step to understanding how to pay off your card is knowing that more debt is added each month in the form of interest. Now that you know how much is being added, you can do something about it.
Start Paying Bi-Weekly
If possible, start paying bi-weekly instead of monthly. Through the magic of math, you will pay 26 half-payments instead of 12 payments. That’s one full extra payment a year. You must pay every two weeks, not just twice a month, however, or the math no longer works out. Splitting your payments in half not only means an extra payment, but also lowers your interest charges. Because you are paying twice a month, you have paid down the account a bit by the time interest is calculated.
Round Up On Payments
If you have a little extra money, you can round up on your payments. Is your normal minimum monthly payment $175? Try paying $200 instead. The extra $25 may not seem like it’s making a dent, but each of those little extra additions will add up in the long run. It’s an additional $300 each year if you are paying $25 each month. That’s almost two extra payments at $175.
Pay Down More Principal
One of the best options is just putting as much extra money as you can towards paying off your credit card debt. It will affect your overall interest, meaning you are paying less money over time. One great way to do this is to use the extra money you get from a raise at work to pay down debt. If you are already used to living at your old paycheck rate, then you won’t notice the difference. Instead, you will be paying off your credit card debt faster.
Consider Transferring Credit Card Balances
Finally, consider transferring your credit card balances to a single loan with an attractive APR. This combines payments into a single monthly payment. A company will issue a line of credit, assuming you qualify, and pay your debt. You then pay that company at the interest rate they offer you. You can use a credit card debt calculator to discover how consolidating your cards can help. It might also give you a good plan for paying off your credit card debt.
About Tally
Tally’s goal is to help you take control of your finances and get back to focusing on the things that truly matter. To do that, Tally aims to help you break free from debt. Everyone deserves to be debt-free. The Tally system was created by people who know and experienced credit card debt, and who seek to level a financial playing field that is intentionally complex. With Tally, you can see if you’re qualified for a lower-interest credit line to consolidate your credit card balances, helping you be less stressed and better off financially. It can save you money on credit card interest and give you an organized plan to break free from debt. Get the credit card debt support you need. Turn to Tally when you need help with financial matters.
Get more information on how you can pay off your credit card debt at https://www.meettally.com/
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Disclosures: Tally Technologies, Inc. (NMLS # 1492782 NMLS Consumer Access. Lines of credit issued by Cross River Bank, Member FDIC, or Tally Technologies, Inc. (“Tally”), as noted in your line of credit agreement. Lines of credit not available in all states.
