“Help me pay off my credit cards!”
Carrying a balance on your credit cards? You're not alone! The Average American has more than $5,000 in credit card debt. Fortunately, a few simple strategies from our experts can reduce that balance in no time.
Shrink your bills!
An easy way to save hundreds in interest charges? Get a balance transfer credit card! Switching the balance from your high-interest card to one with an introductory 0% rate or a lower rate makes it much easier to pay it off faster, explains finance expert Bruce Mcclary. Just compare the length of time the low rate lasts— usually six to 21 months— and select one you can pay off within that time.
Speak up to save!
Often, the easiest way to get a lower interest rate is simply to ask! A new poll found this works for more than three out of four people who try it! When you call, ask for a lower rate— say, around 9%. Even if the company makes a higher counter offer, you’ll still end up saving hundreds.
Spot costly credit report mistakes!
Surprising but true: 20% of us have mistakes in our credit reports that we don’t even know about! “It’s important to clean up errors, such as a wrong report of a missed payment, because they can lead to you being charged more interest,” Mcclary says. You can get a free copy of your credit report once a year from Annual Creditreport.com. A common mistake? Listing a debt that’s already been paid off, like an old car loan. If you spot errors, check the credit bureau’s website to file a request to remove it— it takes just a few weeks to clear up.
Zap debt with a “blizzard”!
The most successful way to pay off credit card debt? The snowball method! Here’s how it works: Pay off the card with the smallest balance first, then move on to next highest, and so on. “Once you start to see those balances disappear, you’ll naturally want to keep on going,” enthuses credit card expert Beverly Harzog. But if your balances are mostly on cards with high interest rates, it may make more sense to use the “avalanche” method: Start by making the biggest payments on the card with the highest interest rate first, then work your way down to the lowest. You’ll save more money in interest charges this way,” says Harzog—and she should know: She paid off about $20,000 in credit card bills in just two years! “What worked best for me is a combination that I call the ‘blizzard’. Start by using the ‘snowball’ to pay off the smallest balance, then switch to the ‘avalanche’ to pay off the rest!”
2 Stay motivated! Get help from your friends!
Enlisting a supportive group of friends can help you become debt-free 33% faster, studies show. “Some of your friends probably need to pay off their credit cards, too,” says consumer expert Lisa Rowan. “You can have a monthly get-together to cheer each other on as you pay down debt. Everyone can share their tips for saving money and staying motivated, so you can learn from each other.” Also smart: Ask everyone to set a debt-reducing goal to share the next time you meet. Feeling accountable to the group really helps everyone stay on track!
Celebrate your wins!
Building in some rewards as you pay off your bills can increase your motivation 85%! “Acknowledge your progress by giving yourself a treat when you’ve made a payment of, say, $50 or $100,” says Harzog. “You can get a manipedi or buy yourself a rose or two, for example. I like to treat
Consider credit counseling!
A nonprofitdebt counseling service c an help you put together a plan to pay off your bills for free or at a l ow cost. “These services look at your overall financial situation and give you options that are within your ability to pay,” explains Mcclary. For example, they can consolidate all your highinterest bills into one low-interest payment. To find a debt counselor, go to the National Foundation for Credit Counseling (NFCC.ORG) or the Financial Counseling Asso ciation of America (FCAA.ORG).
myself with a bottle of wine, but rewards don’t have to cost anything at all.” Take a long walk with your dog, savor a sunset or soak in a bath by candlelight!