5 Tips to Pay Off Credit Card Debt Fast

5 Tips to Pay Off Credit Card Debt Fast
Credit card debt is very easy to rack up because you can spend it on anything you like and continue to do so until you’ve hit your limit. Unlike other loans such as school loans and car loans which have a specific purpose, you are free to spend however you please with your credit cards, which is why many people get trapped in unmanageable debt. The average household has just under $16,000 in credit card debt but having more than that is not at all uncommon. So how can you get rid of your credit card debt faster?

The Amount of Debt
Before beginning a plan of any kind it’s important to know how much debt you really have. Many people just assume a number but have no idea exactly how deeply in debt they are. Check all of your statements, call all your credit card companies and find out exactly how much your owe. It’s easier to keep track of it if you write down the amount you owe along with the minimum payment and when it’s due. This way, you have all your records right in front of and you can begin to manage it properly.

Stop Using Your Credit Cards/Budget Yourself
This seems like common knowledge but once you start paying off your credit cards, you don’t want all your hard work for nothing by getting them racked up again. Get into the habit of planning out a budget for yourself that you can pay your expenses in cash. Keep tweaking this budget until it works for you; if you find you spend more than you should and can’t work on paying down your debt, try to lower some of your variable expenses or get a second stream of income.

The Snowball Method
The snowball method is a very simple way of saving a lot of money on interest and it’s very effective if stuck through to the end. Basically with this method, you single out your debt with the largest interest rate and focus all your money into that first; only pay the minimum payment on the remainder of your debts until the one you’re focusing on is paid off. Once that one is paid off, move onto the next highest interest rate and continue this until all your debts are paid off. By using this method, you’ll save on the accumulated interest of your high interest credit cards and can use the money that you save to accelerate your debt repayment program.

The Snowflake Method
While the snowball method focuses on putting a lot of your energy into one debt at a time, the snowflake method focuses on making very small payments as often as you can. The point of this method is the accumulation of the small change that we would otherwise spend on something we don’t need. We’re literally talking about $4.57 payments and $13.81 payments. These seem too small to matter but if you put these into your debt as often as you can, within a month that could be an extra $100 or more. By using these methods together you can get even more out of your debt plan and pay off your credit cards even faster.

Paying Debt Doesn’t Happen Overnight
Paying back debt can be a long and tedious process but it’s well worth it in the end. The important thing to remember is that consistency really is the key to succeeding and to stick to the plan no matter what. If you just pay off a little bit and then stop or continue to use it and rack it up again, you’re right back where you started. Use these steps to help pay off your credit card debt and try to keep at it for an extended period of time. By working hard and being consistent you can be out of debt in no time.

Staz Johnson has been passionately blogging about personal finance, investing tips, economic news and more. For more information, check out her website at Essential Finances.

4 Ways to Avoid Wasting Money

4 Ways to Avoid Wasting Money
Are you tired of seeing your money go down the toilet? Do you wish that there was something you could do to avoid wasting your hard earned cash? If so, you might be pleased to know that there are a few precautions you can take to reduce your chances of spending money unnecessarily. If you know how and when to shop for the products you need, you will be able to buy everything you want without having to worry about what you're spending. Here are some simple ways to preserve your money.

Buy at the Right Time
Don't get something when it first comes out. Wait for a couple months when it goes on sale. If you are buying a car, get something that is a couple years old to avoid losing a ton of money in depreciation. If you're buying an electronic, wait until it is no longer the new hot item that everyone else wants. Once you are able to wait for the sales, you can literally get anything you want for a lower price than other people paid. It's all a matter of seizing an opportunity when it comes to you.

Read the Reviews
If 80% of the population hates a certain product, chances are it's pretty bad. You won't know that though unless you look over the product reviews. There is no easier way to determine what you should and should not buy because most people will be honest about what they like in a product. You have to be careful about which site you trust, as there are some out there that only review products for profit. If a review seems too positive to be true, it probably is.

Pay in Cash
Before you even think about paying for something through financing, you might want to consider all of the money you will be throwing away in interest throughout the loan. There is nothing wrong with getting financed when you need to, but you are going to lose a lot of money that way. By saving for your purchase in cash, you will be able to avoid the interest and potentially negotiate a better deal on your purchase.

Set a Budget
At the end of the day, you really just need to set a budget and stick to it. If you see something you really like, first thing about what that money could be used for. Could you pay off a bill with it? Could you go on vacation with it? Could you send your kid to college with it? What else could you be doing with that money? Asking yourself those kinds of questions will keep you on a financial track every time.


About the Author: Lillian Beatrum is an avid shopper who prides herself in saving money every time she buys. She uses crowdsourced product reviews to learn about anything she needs before she buys it because the reviews there help her pick the good from the bad. With sound shopping decisions, you could be in the same situation she is in.