If debt is weighing you down, here’s how to pay off those credit cards.
- Credit card debt can cost you money as well as damage your credit score.
- Consolidating your balance sheet, changing your lifestyle, and getting the side hustle and bustle can be your ticket to end a debt-free new year.
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Credit card debt can be challenging on several levels. First, there are monthly payments – the ones that are likely to monopolize a daunting chunk of your income. Plus, high levels of credit card debt can actually lead to a lower credit rating, making it difficult to get a loan when you need it.
If you start 2022 with credit card balances to be paid off, three key steps on your part could get you out of debt by the end of the year. Here’s how to get rid of credit card debt and move on.
1. Make your balance cheaper to pay off
The problem with credit cards is that they tend to charge high interest rates, so even modest balances can grow larger over time as interest accumulates. If you’re sitting on a few high-value credit card balances, consolidating that debt might be a smart move.
One option to consider in this regard is balance transfer. If you have a good enough credit rating, you can qualify for an offer that will allow you to transfer different balances to one card at a lower interest rate, or even with an initial rate of 0%.
Another area worth exploring is consolidating credit card debt with a personal loan. If you can get a loan at a lower interest rate than your credit card is charged, your debt will be cheaper to pay off.
2. Change your budget to free up more money.
There may be certain expenses in your budget that you can cut back. If this is the case, revising your budget can help you get rid of your credit card debt faster.
Take a look at your various accounts. You might be able to spend a little less on food (for example, by swapping out some takeout meals with homemade ones), or lower travel costs by combining work with a co-worker who lives nearby. In fact, a series of small changes in your spending can free up enough money to significantly affect your credit card balance.
3. Increase your income with a side job.
You may need extra money to stay ahead of credit card debt. Since you cannot count on winning the lottery, you can take steps to increase your income by getting the side hustle and bustle. Since this money will not be used to pay regular bills, you can use all of it (minus tax arrears) to reduce your credit card balance to $ 0.
Believe it or not, there are a number of lucrative side-matters that you can tackle without having to stick to a tight schedule. For example, if you have a car, you can register to use the driver’s call service. And if you’re good at numbers, you can see if you have medical bills or data entry work that you can do from home when you have free time in the evenings.
If you have credit card debt, you are in good company, but that doesn’t mean you should stay with them. Follow these tips and hopefully you can end 2022 with fully paid credit cards.
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