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Credit cards: A convenient way to manage your cashflow, rack up reward points, and improve your credit score!
But with all the flexibility and rewards that credit cards offer, it can be easy to slip into debt and end up paying plenty of interest every month.
Want to wipe out your debt this spring? Here’s how to pay off credit card debt fast, so you can stop losing money to high interest rates!
Inflation has made the costs of living increase across the board - and that means credit card debt packs more of a punch.
Your credit card balance is due on the date listed on your statement. If you don’t pay the full amount owed by that date, you’re charged interest on the outstanding balance.
Depending on the type of card you have, you could be paying interest of up to 19% on the outstanding balance. If you carry a balance on your credit card month to month, that means you’re paying a lot to borrow money – which is known as high interest debt.
With credit card debt, compound interest works against you. You end up paying interest on the interest accrued from your outstanding balance. That makes it easy to wind up even deeper in debt.
Contrary to popular belief, there’s no benefit to carrying a balance month to month. Learn more about credit card myths.
A secured loan requires collateral (an asset, such as a car or house) the lender can seize if the borrower stops making payments. A secured loan is less risky for lenders, so interest rates tend to be lower.
Unsecured debt tends to have a higher interest rate. Credit cards are a type of unsecured debt, which is why interest rates are higher than a loan secured by a house or a car.
This is the minimum amount you need to pay to keep your account in good standing. However, you’ll still pay interest on the outstanding balance that remains. That’s why it’s best to pay more than the minimum payment whenever you can.
Here are 3 ways tackle the balance on your credit card and pay down high interest debt:
Saving for your goals is always a great idea! But if you’re losing money to high-interest debt, it might be smarter to pay down your debt first, and then build up your savings.
What optional expenses can you trim down until your credit card debt is wiped out? Even if it means pausing subscriptions for a couple months, keep in mind how much credit card debt costs you.
Learn more about how to balance your budget with the 50/30/20 rule!
One of the biggest problems with credit card debt is the high interest rate you may be paying on it.
What if you could get a lower interest rate and pay off your debt sooner?
That’s what debt consolidation is for. It’s a way to wrap multiple debt sources into one monthly payment – and potentially save thousands with a lower interest rate.
You may be wondering: Does debt consolidation hurt your credit score?
No! It’s the opposite: Consolidating your debt can actually improve your credit score. That’s because it can help you get out of debt sooner.
Find out more about how debt consolidation works.
You don’t have to navigate debt alone. Book a meeting with a Cambrian Advisor to talk about how you can get out of credit card debt. From debt consolidation to managing your budget, we’re here to help!
We would be happy to discuss your unique situation with you.
Our goal is to make complex topics like this one, simple.
It takes less than 5 minutes to make an appointment or to apply online. It is up to you how you want to meet your advisor - you will have the option to meet your advisor:
