Credit card debt is a problem that gets out of hand quickly. Racking up a huge balance is easy – paying it off is much more difficult, and can take a very long time. First of all, if you’re reading this blog post and realizing you don’t have much credit card debt, congratulations! Keep it that way. However, if you find yourself fighting a losing battle against your bank account, here are three strategies that might help you get a handle on that beastly balance.
Strategy #1: Focus on the card with the highest interest rate.
Interest is the reason credit card debt gets out of control in the first place. Selecting the card with the highest interest rate and concentrating on eliminating that balance first will save you money in the long run, but it may take a lot of time before you make noticeable progress.
Strategy #2: Concentrate on paying off the smallest balance first.
This might work for those who need discernible milestones to stay on track. Just make sure you still pay a little over the minimum balance on your other cards while you do this. This strategy plays with psychology to keep your payment habits consistent – but you’ll probably end up paying more in interest over time.
Strategy #3: Balance Strategy #1 and #2.
Maybe a mix of these two strategies is best – paying a larger chunk on a high-interest card one month, and then making more headway on a smaller balance the next month. The important thing to remember is to keep paying a little over the minimum balance on every card. Take the finance charges into account, too – sometimes these can be even more than the interest rate!
The bottom line is that you should pick a strategy that you will stick with. Make some milestone goals to hit and measure your progress, rewarding yourself with a (non-monetary!) treat when you hit them. But really, eliminating your revolving debt should be reward enough in itself…right?