Credit card debt is nothing so much as the proverbial monkey on your back. Credit card companies draw you in with low introductory rates and promises of building a fantastic credit score (so you can get yourself even further in debt). Then, before you know it, you’re carrying a balance of hundreds or thousands of dollars, your rate has jumped up, and you don’t know how you’re ever going to get it paid off (especially since it seems to be growing exponentially with each passing month). And of course, you realize at some point that you’re paying a lot more than you originally intended for your purchases, a number that continues to grow the longer you carry the debt. But what can you do? You can’t un-spend that money. Luckily, there are a few ways to lower your bill more quickly and avoid some of the interest you might otherwise have to pay.
For starters, you need to stop spending. Ideally, you should cut up your card, but you can also opt to hide it in a secure location where it’s hard to get (a safety deposit box, for example). If you don’t have the card on you, you’ll be less tempted to use it for frivolous purchases. This will limit you to using only what you have in your bank account (although you might want to keep it intact for emergency purposes). It sounds like common sense, but you’d be surprised how many people never consider that half the reason they can’t pay off their card is because every time they make a payment they immediately spend the surplus.
Next, you should look at ways to lower your interest payments. You likely have more than one card at your disposal, but they probably don’t have the same interest rate. You want to get debt off of the card with the higher rate more quickly (since it builds up faster), so as you pay down the card with the lower rate, arrange for a credit card balance transfer that will move your debt to that card. It may require some amount of calculation to pull off, but soon you’ll have all of your debt off the higher-rate card. Even though you’ll still pay ongoing interest on the card with the lower rate, it will save you a few bucks (or more) in the long run.
You can also make multiple payments throughout the month (like on days when you get your paycheck) as a way to cut back on compound interest that has you paying interest on the interest you’ve already accumulated (it’s a little confusing, but paying more means paying less over time). And you should always try to send more than the minimum monthly required payment. Although paying the minimum will reduce your debt over time, you’ll rack up quite a bit more interest this way.
As a last resort, you can always try to negotiate with your creditor to reduce your debt. If you simply can’t make the payments, but you still want to try to pay them off, they may be willing to reduce your bill by a significant portion in order to recover at least some of what paid out. This will lower your monthly bill and allow you to make good on your debt (so as to avoid black marks on your credit). But you’ll never know if you don’t ask.
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