Congratulations! You’re really on a roll. You’ve got a budget, you’re investing, and you’ve even started planning for your retirement years.
If you haven’t started already, it’s time to get your credit card debt under control.
Why is it so important to get my credit card debt under control?
It’s important to get your credit card debt under control because you’re wasting money every month paying interest if you don’t pay off your balance in full. Unlike car debt or a mortgage, you don’t have anything to show at the end of the day with credit card debt – you just owe credit card companies a lot of money! As well, credit card interest rates tend to be much higher than interest rates on mortgages or credit card loans.
So how do I get started?
That depends on your personality. It’s best to start paying off the credit card with the highest rate. But if you’re the kind of person who needs a quick win to remain motivated, then it may be best to start paying off the the credit card with the lowest balance. Either way, the key is just to throw any extra money you have at your credit card debt.
To learn more about different approaches to paying off debt, read my post on debt avalanche versus debt snowball. There’s no one “right” approach as long as you’re paying off your debt!
Is there anything else I need to know about paying off my credit card debt?
Hopefully you’ve already slashed all unnecessary expenses, but if you find any while reviewing your credit card statements, now’s the time to cut them out. As well, you can pay off your credit card debt faster by switching to a low or no-interest credit card and then transferring over your balance to that card.
But it’s important that you read the fine print if you do a balance transfer as most low or no-interest credit cards tend to only stay that way for a limited amount of time. You also need to avoid running up your debt again, which can be tempting with a low or no-interest credit card.
The Takeaway
Credit cards can be great tools if you use them wisely. But they can also lead you down a path of overwhelming debt. So take a good look at your credit card statements, cut out unnecessary spending you see on them, and start paying off your balances!
