How to Pay Off Credit Card Debt

Five Tips for Eliminating Balances on Credit Cards

May 23, 2009 Jennifer Murray

The length of time it takes to pay off credit card debt can be dramatically reduced by following these few simple tips for paying off credit card balances.

The goal of many credit cardholders is to pay off credit card debt in order to free up money to add to a savings account, take a vacation or just to pay other necessities without paying interest. Depending on how large of a balance is on a credit card, paying the balance in full may take many years, especially when paying only the minimum monthly payment and/or high interest rates. There are a few things a cardholder can do to quickly pay off credit card debt.

Pay More Than the Minimum Payment

The quickest way to pay off credit card debt is to obviously pay the balance in full right away, but this is not always possible. Paying just the minimum monthly payment is oftentimes futile when the goal is to completely pay off the debt since the majority of the minimum monthly payment is taken for interest with very little being applied to the principal. Try to pay double or triple the minimum payment until the balance is paid in full. As the balance is paid down, the monthly minimum payment will also go down as well; however, continue to pay double or triple what the initial minimum payment was.

Transfer Credit Card Balances

If possible, transfer the highest balances to credit cards with a lower rate or no interest at all and pay off the balance during the incentive period. Many companies offer zero percent interest or a very low interest rate for the first six months of a balance transfer. Be sure to check what interest rate will be paid after the incentive period to ensure the new rate is a comparable or better rate than the current rate being paid.

Pay Credit Cards with Highest Rate First

To pay off credit card debt, pay off the card with the highest interest rate first. Once the card with the highest interest rate is paid off, move on to the card with the next highest interest rate. Paying off the higher interest rate credit cards frees up cash to pay on cards with lower interest rates.

Negotiate with the Credit Card Company

There are no rules stating that consumers cannot call their credit card company and try to negotiate a lower interest rate. In fact, many cardholders have had success in getting the interest rates on their cards lowered just by calling the company and asking. The worst that can happen is the company says no, but in today's economy, more creditors are willing to work with cardholders.

Sell Unused Household Goods

Generating extra cash to pay off credit card debt has two benefits: extra money to pay off a debt and getting rid of unused household items. Have a yard or garage sale and sell any unused household goods or take clothing that is no longer worn to a consignment to come up with some quick cash to pay off credit cards.

When trying to pay off credit card debt, it is important to not add any additional debt to the card. Once the balance is paid off, the best thing to do is close the account and keep only one or two credit cards with a low interest rate for emergencies.

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The copyright of the article How to Pay Off Credit Card Debt in Personal Budgeting/Finance is owned by Jennifer Murray. Permission to republish How to Pay Off Credit Card Debt in print or online must be granted by the author in writing.

Pay More Than Minimum to Pay Off Credit Card	Transfer Balances to Low Interest Cards	Call Credit Card Company to Ask for Lower Interest
Keep One or Two Credit Cards for Emergencies