Best Ways to Pay Your Credit Card Debt

Best Ways to Pay Your Credit Card Debt

Last Updated : July 18, 2020, 3:10 p.m.

Credit card is always considered easy money at the time of need. You can use credit card at the time of emergency to pay your bills and make other payments. Credit card can also be used for numerous other reasons as it gives you freedom to use it at multiple places and different reasons. You can make bill payments, shopping, make online payments for your bills and buy things online. Book your air tickets and train tickets, book your hotel room and tour packages. You can even use to it buy your grocery and other day-to-day utilities. This way we can say that credit card is one stop destination for all your financial needs. But it comes with liability and caution. You should not forget that the more you spend, the more you need to pay back. However, these cards offer you special schemes and benefits on higher spending. Keep this in mind that these cards also charge a higher rate of interest on outstanding dues. Banks charge somewhere 14 to 19% interest on the outstanding amount, and at times more depending upon your credit history.

A bad credit card history can land you in trouble in long-term. If you have a tailing credit card debt, try to settle that debt to ease your financial burden. A bad credit card history can put you into a negative score if you apply for any kind of secured or unsecured loan from any bank. To avoid such kinds of long-term financial issues try to make your payment cycle and payments error free. Here are some simple ways to pay your credit card debt with ease.

  1. Create a budget: It is really important that you should create a budget for clearing your long outstanding debts. Make a list about your spending and your monthly income. Try to minimize the unnecessary spending. If you are planning some vacation or thinking to make a big purchase, just postpone it for some time. Use that money to clear your outstanding payments and reduce your interest outgo. Scrutinize your budget and eliminate all unnecessary expenditure from your monthly budget to save more money.
  2. Follow your monthly plan: Once you are done with all calculations and creating your monthly budget, just follow it religiously. Don’t spend your money on such things which are not into your monthly budget. Try to avoid spending beyond your budget limits. To reach your saving goals, you should follow your monthly plan and avoid overspending.
  3. Payoff your most expensive debt first: This is the best way to reduce the interest outgo. First, check how much interest you are paying on your credit card debt outstanding. After that try to find out, which card charging you higher rate of interest among all. Try to settle the payment for the one, which is charging maximum amount on your debt.
  4. Avoid using credit card: We all know that credit cards offer you more benefits on spending than debit card. Still, try to make payments through your debit card as compared to your credit card as much as you can. This will affect you initially, but it will also help you to keep a check on your spending and available balance. At times, we end up buying unnecessary things with credit card, which we generally avoid while making payments with debit card.
  5. Use your incentives & bonus for payment: If you are gaining monthly incentive and performance bonus, use this money to make payments of outstanding debts. It will help you to minimize the outstanding amount as well as lower the interest. Just avoid the temptation to invest that money into any personal luxury purchase. Try to make your debt payment with this amount to ease your financial burden.
  6. Link your debit card with online stores: Are you a frequent shopper from online stores? Delete your credit card information from these portals. Find a check out way to de-link your credit card information and add your debit card on its place. However, these credit card offers you more benefits and free gifts on making payments, but resist the temptation for getting into bad debt trap.
  7. Sell unwanted household/gift items: Your unwanted household or gift items can help you to earn some money. You can sell such items, which you have never used, sell such items in online stores which sell used and unused items. You can sell old, unused furniture, electric items, old mobile phones and other gift items to earn some money.
  8. Use balance transfer: Transfer your outstanding balance with lower rate of interest with some other bank. Make payments from a bank card which charges you lower rate of interest to save money on interest amount.
  9. Work part-time as well: If your daily routine job allows and give your bandwidth to work part-time, just grab a part-time job. This is the best thing you can do to pay your outstanding amount rapidly. There are many part-time and work from home assignments, which you can take to earn some more money to pay off your outstanding debt.
  10. Cut budget on entertainment: Going out for dinner several times in a week, or ordering food from restaurant is your common habit. Change it to save more money. Avoid watching movies in theatre for some time. If you are using your car or taxi for daily commuting, use public transport instead. This is the best way to keep a track on your weekly spending and avoiding unnecessary expenditures.

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