Paying off credit card balances at the starting point of one's life is a hard task. However, repaying that debt as quickly as possible will result in the avoidance of high-interest charges. Your credit rating will rise. You will also be on a more stable financial footing.
Make an achievable and flexible plan
There is an even chance that as a borrower, you are paying off the credit card debt and managing a number of important life changes at the same time. The latter could involve a change in jobs or a relocation. At this point in your life, you will find it more convenient to set priorities and not deadlines. Begin by calculating the balances which are stuck to the credit card you use. Decide which balance you wish to eliminate first and act upon it.
Courtney Ranstrom of Portland-based Trailhead Planners says that the hardest debt to repay is the first credit card debt. According to the certified financial planner, once you have paid off the debt accrued on the first credit card, you can use the portion of the money you were previously spending on the first card to pay off the remaining debts. Ranstrom recommends that you should put extra money towards the balance having highest percentage rate every year, and making the minimum payments on other cards. Yet another approach could begin with the smallest balance. This will provide you the psychological advantage of continuing this program.
In case you enjoy excellent credit, you could easily shift the high-interest balances to a card that comes with an introductory zero percent balance and transfer APR. You could pay the amount free of any interest prior to the expiry of the promotional period. Most of such cards, however, charge fees of about anywhere from three to five percent of the transferred balance.
Take a decision on what to give up
Spending cuts will help you repay debts faster. However, giving too much to service debt may result in you suffering from a bare bones budget which may not sustain you until the next paycheck comes. This kind of budgeting is also extremely restrictive. You should decide what to give up. These could be books, personal beauty products or even longer periods of travel. You can also find ways to increase your income. Take a side job and earn the extra money which will help you to be debt-free much quicker.