The Trick To Effectively Pay Off Credit Cards

Streamline your credit card debt

More credit cards usually equates to increased debt and stress. We’re going to show you how to get rid of your debt and drop your financial woes.

  • Maintain your credit card payments
  • Pay the highest interest rate or the smallest debt first
  • Close your credit cards as you pay each one off
  • Lower your credit card limit
  • Credit card balance transfer
  • Get help with your debt if necessary


Maintain your credit card payments

Make it a goal to pay off as much as you can each month to reduce the amount of interest you’re paying on your debts. No matter what, make sure you make the minimum monthly payment to avoid any late payments or penalties.

Your monthly statement will provide information on the total amount of time it will take to pay off the entire balance if you continue to only make the minimum payment.

Pay the highest interest rate or the smallest debt first

You have a couple of options when deciding which card to eliminate first:

  • Pay off the credit card that has the highest interest rate- make the minimum monthly payments on all other credit cards while paying more on the card that has the highest interest rate. This way, you’ll pay off the total on that card first, and then shift your focus on the other cards.
  • Pay off the card with the smallest debt first- Make the minimum payments on all other cards while paying more toward the card with the smallest debt. Once it’s paid in full, focus on the next smallest debt. Repeat.

Whichever you decide, make it a priority to only use one card, and only use it for emergencies.

Close each credit card as you pay them off

As you reach a zero balance on each card, contact your creditors and close your account properly. If you fail to appropriately close your accounts and cancel your cards, you may find yourself with fees for the cards, even when you’re not using them.

Lower your credit card limit

You may decide you’d like to have one credit card for emergencies and online payments. If you do, lower your credit limit to an amount that could be paid in full within a three-month period.

Credit card balance transfer

Another way to streamline your credit cards for the purpose of paying down debt, is to do a balance transfer to a new credit card with a temporary low interest period.

In order to reap the benefits of a balance transfer, ensure that you pay off the full balance transfer amount prior to the low-interest period ending.

Avoid surprising by checking the interest rates that apply to you:

  • After the promotional period- this higher interest rate will apply to any balance on your card that was not paid off in time.
  • New purchases- when you make new purchases with your card outside of the balance transfer, those purchases typically incur the standard interest rate, instead of the promotional rate for the balance transfer.

Get help with your debt if necessary

If you are having issues getting a handle on your debts, you’d benefit from acting swiftly and reaching out for help. Try to address your concerns about your debts prior to them having a negative impact on your credit report.

If you need help with your debts:

  • Contact your creditors immediately- you may be able to negotiate a new payment plan that’s more manageable at this time.
  • Find local programs and initiatives that provide financial counseling or consulting.

Decide to reduce the number of credit cards you have, and choose a credit limit that you can afford.