Let’s say you owe the following amounts: Despite the fact that the largest balance you’re currently carrying is your student loan, you should actually focus on repaying your credit card debt since it has the highest interest rate.
By doing this, you end up paying less interest in the long run.
Usually lenders will offer you a reasonable interest rate on this loan which you could then use to pay off any outstanding debt.
It works similar to a balance transfer credit card since you’re really just consolidating your loan onto your line of credit.
Understandably, while carrying debt, it can feel like having a dark cloud hanging over your head everywhere you go, but you don’t need to beat yourself up over it.
Here are a few different strategies you can employ to mitigate the effects of these high interest rates, so you can pay off your credit card debt once and for all.
With the debt snowball method, you would focus on the lowest balance remaining first which would be your car loan in this example.
It may seem odd to focus on the lowest balance first, but the idea is that by paying it off first, you’ll get a mental boost which will encourage you to tackle the rest of your debt.
Another big difference is that the money is not “reusable” as it is with a line of credit. Depending on your borrowing needs, one of these options may be an excellent alternative to paying the high interest charges that come with a credit card.
From balance transfer cards that can help you ditch debt through to rewards credit cards offering a range of freebies to entice any big spender's appetite, there's never a shortage of plastic to choose from in the bustling credit card market.
Consolidate and use a low interest credit card Debt consolidation onto one credit card is one of the most common ways to start paying off your credit card debt in a more organized and practical way.