Do you know how to tackle high credit card balances? High credit card balances kills your credit and makes you to spend more on debt. When the debt is high, it also amounts to larger interest rates. These high card balances can stop you from getting a loan and even other cards. It is best to have them low. What can you do?
How To Tackle High Credit Card Balances : Transfer To A Lower Interest Credit Card
Cards with high interest rate have high monthly finance charges. Also, more of your monthly payment applies to the interest. To erase this interest, in paying off your credit card balance, transfer your balance to a card with 0% interest rate. Take advantage of the interest free period to pay of your high balances. Pay as much as you can during this promotional period.
How To Tackle High Credit Card Balances : Stop Using Your Card To Make Purchases
To pay off the high balances, stop using your card completely. Using your card leads you to more debt. Using your credit card means spending more, the more you spend, the more your credit card balances increase. You can only pay off your credit card balance when your total monthly purchases (plus fees and interest) are less than your monthly payment. You can only do this faster when you stop using your credit card.
If this is very hard for you, you can hide the card or give it to a disciplined adult who will safely keep it. You can as well cut or destroy it. Remove your credit card from any one-click billing services and set recurring subscriptions to your debit card or checking account. Continue to pay the balances monthly and annual fees. Before you know it , you will completely pay off everything.
Many people think that closing their cards is the pest option to avoid spending. Do not forget that closing a card with high balances can negatively affect your credit score for a while until you reduce your credit card balance.
Avoid making only minimum payments, it is not a good way to pay off your balance. This is because it takes you a longer time to pay and cost you more interest charges. Do not listen to credit card issuers who advise you to make only minimum payments, they are just exploiting you. Pay large sums. This will help you to clear your debt very fast. It will also reduce the cost of interest charges. Check your credit card billing statement to know how long it will take you to pay off your debt when you make only minimum payments. The statement also includes the amount you’ll have to pay each month to pay off your balance in three years. Compare the two.
When you pay large sums monthly, you can easily clear your debt very fast. After clearing this high balance, become more responsible with your credit card. Spend less, pay your balances in full monthly and avoid late payments.