Credit cards are one of the most effective and hassle-free tools to meet financial requirements. However, if not managed properly, credit card expenses can pile up, leading to massive debt. High credit card bills can lead to additional borrowing and thereby impact the credit score of an individual.
Here are some of the best ways to pay off credit card debt faster.
How to Clear Credit Card Outstanding Balance?
Customers struggling to pay off credit card debt can use these strategies to clear the outstanding balance faster:
Individuals with outstanding bills on more than one credit card should pay off the debt on cards with higher interest rates. One might want to clear off the bills on cards with a shorter due date. However, that will lead to more expenses in the long run.
By clearing off dues on cards having higher interest rates, individuals can significantly reduce their total interest outgo. Unpaid dues on credit cards charging exorbitant interest rates will lead to a faster accumulation of interest.
To make the most of the credit-free period on a credit card, one should have a clear understanding of the card’s billing cycle (statement cycle). The credit card issuer provides a credit-free period, which includes 30 days of the statement cycle and usually 10-15 additional days (grace period) for clearing the dues. it starts from the first day of the monthly billing cycle and not from the day of buying something.
For example, let’s say the next due date is July 4 and the statement generation date is June 18. If the cardholder buys something on June 19, this purchase will get included in the next billing cycle and not the current one. Accordingly, he/she will get a credit free period till August 4.
Many credit card holders often tend to pay only the minimum amount. This can potentially lead to mounting credit card debt that can be quite difficult to repay. Those looking to clear credit card outstanding balance should remember that it will take much longer to pay off the dues if they pay only the minimum amount. By paying more than the minimum, one will have to pay lower interest.
Credit cards come with late payment fees and high-interest rates. So, to avoid missing bill payments, cardholders can opt for the automatic payment feature. The bill gets deducted automatically from the account without any involvement of the cardholder. Thus, one need not worry about missing out on the payment deadlines.
While credit cards are highly useful financial tools, reckless use can push individuals into an unending cycle of debt. Customers wondering how to pay off credit card debt faster can follow these tricks to pay off the bills quickly and manage their debt efficiently.