According to a recent study, the average U.S. household with credit card debt has a balance of $6,849. And that balance comes with an average of $1,162 per year in interest. Perhaps seeing those staggering numbers is enough to motivate you to finally pay down your own credit card debt. Here’s how to do it.
Create a Plan
Before you start paying down your debt, it helps to get a solid idea of your current situation. That means reviewing your budget and savings plans. When you free up some extra cash in your budget, create a list of every debt, the monthly payments you can afford and the various interest rates you are paying on your debts. You want to have a complete overview of your finances so that when you do start paying your debt, you’ll have a realistic approach in mind.
Now that you know how much you owe and have some cash ready to pay the balances down, you should figure out a smart payment plan. As USA Today reports, you might want to start small so that you give yourself a greater chance at succeeding. If you try to pay off one card with a huge balance and end up stretching yourself too thin, you’re going to get discouraged and perhaps give up. Set yourself up for success with a smart, affordable, monthly payment schedule.
Attack The Debt
With your plan in place, it’s time to start paying down the debt. There are a few strategies people use, but we typically recommend paying off the card with the highest interest rate first. This way you knock out a big money-eater right off the top. That success will propel you forward as you deal with your other credit card debt.