Paying off credit card debt can feel like a totally impossible challenge, especially if you have multiple accounts to deal with. But, of course, it's not - you can do this. Unless you miraculously suddenly come into big money, paying off your debts won't be easy, but there are some ways you can make the process less stressful and maybe even pay your cards off (cue angels singing) a little faster. If you need help figuring out how to take on your credit card debt this year, try these strategies.
Figure out your financial goal
Before you do anything, you need to figure out your goal. Ask yourself: What will make you feel better about your credit card debt? Consider what your top priority is; is it paying off one of your (many) cards completely, paying less in interest overall, or just raising your credit score?
The goal you want to achieve affects what you do, so if you want to pay less interest, then you should put more towards the cards with the highest interest rates while you pay less or the minimum on the cards with the lowest interest rates. If you want to pay off one card completely, you should focus on the card with the lowest balance and get it out of the way (it's called the snowball method, and it really helps your motivation). And if you want to work on raising your credit score, tackle the card with the most utilization first.
Try lowering your interest
Something a lot of people don't realize is that it might be possible to lower your interest rates if you just call your credit card company and ask about your options. If you have good credit history and have made most or all of your payments on time, your credit card company will want to keep you a happy customer. Other factors that will affect whether or not the company agrees to give you a rate cut: Your credit limit, how much you owe in comparison to your credit limit, and how long you've owned and used your card. The worst that can happen is your card company says no, but you won't be penalized for asking, so it's worth a shot. Bankrate has some great tips on asking and how it works, and even a script you can follow if you're not sure what to say.
Pay twice a month
Since interest accumulates on your credit cards on a daily basis, the more frequently you pay, the less interest you'll accumulate and the less you'll pay over time. A simple way to do this is to pay twice a month—if your paychecks come twice a month, this will be really easy to remember, too. If you can pay even more often, it can't hurt, but increasing from one monthly payment to two will help (even if you pay the same amount overall), and won't mess up your usual routine too much. Just divide what you'd normally pay by how often you want to pay, and make those smaller, more frequent payments.
Cut your expenses (especially the ones you charge)
I know, I know. "Spend less"—it's revolutionary! But the truth is that while you're in debt-takedown mode, you need to curb your expenses to the bare minimum. Take some time to figure out where you spend your money—look at all of your expenses and break down what's necessary and what's not. Once you know what you're spending and how much you owe, you can figure out where you can make some cuts, and then use those cuts to your advantage to pay extra on your credit card bill. And if you have any expenses that are being charged to those credit accounts, stop right now! If you can't afford pay for it in cash now, you're going to have an even bigger debt problem down the line.
Round up on purchases
One way to come up with a little extra money to put towards your debt or your savings without thinking about it too much is to round up on purchases. Think about it this way—if you spend $90 at the grocery store, round it up in your head to $100 and transfer the extra $10 (right away!) to pay down your credit card.
Use your tax return (or bonuses)
Of course, this all depends on how much you made and how much you paid in taxes throughout the last year, but if you happen to get a big tax return, don't give into temptation and spend the money. Take any tax return money you get and put it right towards your debt—put a little aside for your savings if you can, too. Your tax return—and your bonus, if you're lucky enough to get one—is a great opportunity to cut down your debt quicker and help you pay less interest over time.
Stop using it and pay with cash
If you keep using your credit card while you're trying to pay it off, you won't get very far. In order to really slash your credit card debt, you should stop using it entirely and save it only for real emergencies. When you go out, don't bring it with you—leave it somewhere safe at home, and carry cash with you instead so you have to be more careful and thoughtful about exactly how you spend your money. But whatever you do, don't close your card—closing accounts lowers your credit score, and it's even worse if you close an account with a balance on it.