Ways to Help Clear Credit Card Debt

Your credit card debt seems to grow larger even when you pay the required amount each month. Unfortunately, it will take you the better part of 30 years to pay them off since the interest charges are almost as much as your payments. Fortunately, there are ways for you to pay them off faster. All that's needed is planning and perseverance.

Lower Your Interest

Look at the statement of your credit cards and determine which one charges the lowest interest rate. If you have not maxed out that card, transfer part or all of the balance from the account that charges the most interest. You will save a load of money if, for example, you can transfer money that you owe on a card that charges 22 percent to one charging 10 percent less interest.

High Interest First

Arrange your credit card statements, starting with the one charging the highest rate. Make required monthly payments on all but that one. For that account, you should make the largest payment you can afford. You'll be surprised how fast you will pay it off if you are disciplined. Once you have made your last payment on that account, go to the one charging the next highest interest and begin doing the same. That's called snowballing and it's one of the most efficient ways to pay off your credit cards.

Take Them Up on Their Offer

You probably receive offers to transfer an existing credit card balance to a new card for a low introductory rate of interest. If you can transfer a balance from an account that charges 22 percent to a new one at six percent, you should probable jump at the chance. Using that scenario, if you transfer $1,000, you could save upwards of $160 the first year. But check the new card's fine print. Some cards will convert to its highest rate if your payment is late, even by a day. Other credit cards will charge their regular rate, retroactively, if you don't keep your account open for at least a year.

Negotiation

Before an account becomes a problem, many credit card companies are open to negotiation. If you're having difficulty paying your credit card bills each month, they are likely to help if you explain your situation. They may adjust your scheduled payments if that's more convenient. In many cases, they will reduce either the interest rate or the balance of your account to make the payments more manageable.