How to Pay Off Credit Card Debt with Micropayments

A micropayment system can help you pay down your credit card debt faster. Most people pay their bill monthly, which allows more interest to accrue because companies compute that on an average daily balance. However, making several payments each month as money becomes available enables you to lower your average daily balance, thereby lowering interest. As you pay off accounts through this micropayment system, more money becomes available to accelerate your payoff plan.

Instructions

1

Create a budget, allocating the minimum payment due on each of your accounts. Be sure that you hold back money for paying regular bills as they come due. If you are depositing money into a savings account, be sure to include that in your budget. Even if you are in debt, it is wise to save money each month in an emergency fund.

2

Set up online bill pay for all your credit cards. This will save you money on postage and check printing, thereby providing more you can allocate to micropayments.

3

Pay your bills on time and as soon as possible, instead of piling up a stack of bills for your monthly or biweekly bill paying session. If you have extra money at this point, add it to one of your credit card payments.

4

Make a goal to save or earn a specific amount of extra money for weekly micropayments. Most people should be able to come up with at least $15 to $25 weekly in savings and/or extra income.

5

Focus on paying off one account at a time with weekly micropayments in addition to your minimum monthly balance due. If your goal is to pay off the card at the highest rate first, then that is where you will apply those payments.

6

Continue paying the initial minimum payment on this card until it is paid off, regardless of how much your minimum payment is reduced. When that account is paid in full, transfer the minimum payment you were making to the next credit card on your payoff plan and repeat the process.