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Bank Notes: How to pay off credit card debt
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[Music playing] Credit card debt is easy to build up, but can take time and discipline to pay off. Here are three tips to help you get started.
Text, How to pay off a credit card. Tip #1, Get the details on paper
Managing credit card debt begins with writing things down.
Total debts plus interest rates over total income over total expense.
List each of your debts along with your total income and expenses. Use those numbers to make a budget.
Graphics, a calculator and a pie chart
Knowing your income minus your expenses will help you figure out how much money you can divert to goals, like paying down your debt.
Tip #2, Create a payoff plan
The next step is to create a payoff plan.
Monthly payment goal over payoff timeline. A stack of money gets larger, payments are made, a red flag in a blue circle appears
This should outline how much you can realistically pay towards your credit card debt each month, and how long it will take to achieve your payment goals.
Prioritize cards with the highest interest rates
Let's say you've opened credit cards at all your favorite stores and you're carrying balances on all of them. Part of your plan could be to pay off the card with the highest interest rate first.
Three credits cards move down and a payment book appears with a percentage sign and a red down arrow
You can also look into credit card debt consolidation, which rolls all your credit card bills into one lower interest monthly payment. The amount you owe will still stay the same, but you'll pay less in the long run.
Text, Ask your lender for options
Don't be afraid to ask about interest and payment options, and whatever strategy you choose, always try to make more than the minimum payment each month.
So you've listed out all your debts and come up with a payment plan that works for your budget.
Tip #3, Cut expenses plus save money
Now it's time to see where you can cut expenses and save some extra cash to lower your balance.
Dollars slide into a wallet
Consider setting up automatic transfers to your savings account every payday. That way, you can put aside money for your car payments before you have a chance to spend it. Before long, you could pay off a chunk of debt without much effort.
Even little changes such as shopping the sale section or opting for generic products instead of brand names can really add up.
Stacks of money with wings flapping rise up
Above all, make every effort not to add to your debt while you're paying it down. Paying off credit card debt takes time and effort, but it's a fundamental step toward financial security and freedom.
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The average amount of credit card debt held by balance-carrying U.S. households is more than $16,000, according to Federal Reserve figures for 2017. Are you one of the many Americans searching for the best ways to pay off credit card debt?
Read on or watch the short video above for tips to help you pay off your debt and keep more of your hard-earned money in your pocket.
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How to pay off credit card debt
Assess your credit situation.
The first step to managing your credit card debt is to get the details on paper. Write down line by line each of your debts — including interest rates — as well as your income and other expenses.
Once you’ve documented these numbers, you have the foundation for creating a budget, which allows you to design a realistic plan to pay it all off.
Resolve to pay your credit card bill in full every month.
The first step to managing your credit card debt is to get the details on paper. Write down line by line each of your debts — including interest rates — as well as your income and other expenses. Once you’ve documented these numbers, you have the foundation for creating a budget, which allows you to design a realistic plan to pay it all off.
Make a plan and stick to it.
Create a strategy that outlines how much you will realistically pay toward your credit card debt each month and how long it will take to achieve your repayment goals.
Then — and most importantly — adopt the best practices that will help get you in the right mindset and ensure that you will commit to your plan.
1- Try to pay high-interest-rate credit cards first.
2- See your credit card as a tool for convenience, not extra cash you have to spend.
3- When possible, make more than the minimum payment each month.
4- Start with the right card. Find banking programs that offer credit card management tools.
Use tools for paying down debt.
Get help from financial tools to better organize and understand how to pay off credit card debt.
Pay off debt faster.
Consolidate credit card debt.
Work with your credit card company.
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Paying off your debt may take time, but it will be a sound investment that pays dividends in improved management skills to make your money work for your future. Continue reading to learn more about U.S. Bank credit cards.