While no one wants to have credit card debt, it’s often necessary to satisfy certain needs. There’s a lot of advice out there on how to handle credit card debt — some better than others. However, people don’t often address how soon you should pay off your credit card debt.
The Difference Between Good and Bad Debt
Most people have negative connotations with the word debt. It means that you owe someone something — and that’s never a good feeling. But in reality, not all debt is the same. While it’s always preferable to not owe money, some types of debt can work to your advantage.
Good debt can be used for things that will end up being worth more than you’re paying for them, or provide you with some kind of essential need. People often cite mortgages and student loans as good forms of debt because they create value and typically don’t have egregiously high interest rates.
Credit cards are almost always considered a bad form of debt. The things you purchase with a credit card are almost always going to lose their value. Plus, credit cards come with some of the highest interest rates of any form of debt out there.
How Should You Approach Credit Card Debt?
It’s time to think about the best ways to approach paying it off, now that you understand why credit card debt is bad. In almost all cases, you want to pay off your credit card debt as fast as possible.
When it comes to a mortgage, you might actually be better off paying that debt down over the long term, since it’s no different than paying a fixed rent. Plus, your money might be able to produce a better return than the interest rate if it’s invested somewhere else.
This, however, doesn’t apply to credit cards. You want to eliminate your credit card debt as soon as possible so you can avoid racking up interest payments. But how should you do this?
It’s been shown the snowball method is the most effective approach for paying down credit cards. This is where you fully pay off your debts in order of balance size, starting with the smallest. The psychological benefit of eliminating those smaller debts helps people continue on to paying off their larger ones.
What If You Can’t Do It on Your Own?
You may be aware that paying off credit card debt is easier said than done. For people struggling to do so on their own, it might make sense to talk with some experts. Debt Relief is one route that can provide a much higher rate of success for debt repayment.
It’s important you do some research to find a company with a strong track record with consumers. Looking at Freedom Debt Relief reviews shows it’s an organization that has helped thousands of people get back on their feet financially. Opting for debt relief can help you pay off your credit card bills faster, and even save money. It will also provide a way for you to eliminate debt without having to go through bankruptcy, which isn’t a fun process at all.
What Are Other Things That Can Help You Pay Off Debt Faster?
There are additional things you can do to put yourself in a position to pay off your credit cards in less time. Some of these won’t be the most enjoyable thing in the world; but they’re far better than the alternative of being burdened by debt. Here are some ideas:
- Take on a side job or do some freelance work to make additional income. Use this money to pay down your credit cards and build an emergency fund.
- Ask for a raise or promotion at work. That extra money can go a long way in paying off your debt.
- Sell items you’re not using. Generating instant cash flow can be a huge boost in your debt repayment plan, and save you a lot in interest.
Credit card debt is a scary thing to have hanging over you. Fortunately, there are ways you can tackle the debt and regain financial freedom.