The Update

Paying Off That Credit Card Debt

I have four credit cards and set a goal to pay them all off as quickly as possible. Should I just add a little more to the minimum payment on each of them or use a different strategy for deciding which to pay off the quickest?

Paying off your credit cards as quickly as possible is a great goal and well worth the effort you will invest. As you probably realize, it’s more important to measure your bills by interest rate than by balance.

Snowball Method

One of the best methods to use is what’s called the “snowball” method. Using the snowball, you first pay the minimum payment on each card and then take the remaining funds and add them toward the payment on the card with the highest annual percentage rate. When that card is paid off, you add on to the payment of the card with the next highest interest rate, and so on.

Though sound financial planning tells you to pay off the credit card with the highest interest rate first, some people want the feeling of accomplishment that comes from paying off an entire credit card. If you’ll only feel tangible progress by paying off your lower balances first, do it; but remember that the most important thing is to pay off those higher-interest cards that might take longer.

Once you’ve started, stick with it. When you see you’re making progress, don’t slack off.

Affordable Monthly Payment Plan

Establish an affordable monthly payment plan, and when one credit card is paid off, transfer those payments to the next one. An extra $50 per month on your payment can mean the difference between paying off a $3,000 debt in three years or eight years.

Peace of Mind

Consolidating your debts can provide peace of mind. With a clear plan and a manageable payment schedule, you can focus on achieving your financial goals without the burden of overwhelming debt.

A debt consolidation loan with RGCU is an effective way to regain control over your finances and pave the way for a brighter financial future.