How to pay off credit card debt
- Stop spending
- Create a repayment plan
- Pay more than the minimum
- Make extra money
- Adjust your expenses
- Consolidate your debts
There isn’t one right way to pay off credit card debt, but there are a number of strategies you can employ to make things a little easier. The most important thing is to stop using your credit cards, as this will allow you to work out a payment plan without continually adding to your debt. Let’s take a look at some tips that will help you work your way out of credit card debt.
As mentioned, the first and most important step is to stop spending money on your credit card. If you keep adding to the amount you owe, it will be increasingly difficult to make significant progress. Even if you’re not in a position to increase your repayments right away, lock your credit card away in a drawer and resist the temptation of using it for any upcoming purchases.
Create a repayment plan
It can be all too easy to ignore your credit card debt and continually pay the minimum balance due each month. But if you’re serious about paying off your credit card debt, you need to create a repayment plan.
First, work out how much you can afford to pay back every month and commit that money to paying off your credit cards. You can even set a direct debit, so it happens automatically. Then, when you have a plan in front of you, it’s much easier to stick to your repayment target, and you can start paying your debts off.
Pay more than the minimum
Every month, you are required to pay off the minimum balance on your credit card. But even if you can only manage an extra £10 per month, it will at least eat away at your credit card debt. Paying the minimum is essentially servicing the debt, putting off the payment until later. As you get better at saving, you can slowly increase the amount you pay off every month.
Make extra money
Okay – so you can’t turn to a magical money tree to pay off your credit card debt, but you can make some extra cash. Consider launching a side hustle alongside your full-time job and use your earnings to make additional payments on your credit card.
For example, you can set up an eBay store, drive for Uber, or try your hand at some freelance writing. This is an ideal way of paying off your credit card debt without making radical changes to your expenditure.
Adjust your expenses
While we all have essential outgoings every month, there might be some wiggle room in your monthly expenses. Things like your gym membership, cable TV, weekly takeaways, daily trips to Starbucks, or your weekend party habits can all be toned down.
While we’re not telling you to live like a monk, it is a good idea to restrict your expenditure if you’re in credit card debt until you’ve paid off what you owe. Then, the money that you save on the above expenses can be put towards increasing your monthly repayments.
Consolidate your debts
If you have multiple credit card debts and things seem to be getting out of hand, you could opt for a debt consolidation loan. Debt consolidation loans allow you to borrow a set amount of money that you need to pay back over an agreed period of time (plus interest).
When you receive the cash up front, you can use it to pay off all of your outstanding credit card debts. It means that you would now only be liable to pay off the debt consolidation loan that you’ve just taken out, which might save you money and will make your life a lot easier.
At Koyo Loans, we offer debt consolidation loans in the form of unsecured personal loans of between £1,500 and £12,000. 24.9% APR Representative. To work out how much you could borrow to pay off your credit card debts, use our loan calculator and submit an application to get started today.
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