Tips to pay off your credit card debt faster
Depending on your lifestyle and how long you’ve had a credit card, paying off your credit card debt can seem challenging and may stand in the way of your other financial goals. Luckily, there are different methods available for you to pay off your credit card debt faster.
This is a popular debt reduction strategy that involves paying off debt in order of smallest to largest. When the smallest debt is paid in full, you roll the minimum payment you were making on that debt into the next-smallest debt payment. By getting rid of the smaller debts, you free up cash to pay off other debts.
- Make a list of your debts from smallest to largest regardless of interest rate.
- Make minimum payments on all your debts except the smallest one.
- Pay as much as possible on your smallest debt or pay it off completely and repeat the process until each debt is paid in full.
Paying off smaller debts might feel more manageable and less overwhelming than tackling larger debts. And paying off one debt at a time helps you gain momentum and get used to the process.
This method is the opposite of the snowball method. With the avalanche method, you pay as much as possible towards your highest-interest debt, while making minimum payments on the rest, until all your debt is paid off.
Paying off your bigger debts (the most expensive debt) first means getting rid of the highest-interest amounts, which will free up cash to pay towards other debts or save.
Another option to consider is paying off your credit card debt with a lower-interest personal loan. This option will allow you to eliminate multiple monthly high-interest card payments and consolidate the debt into one monthly personal loan payment.
Personal loans, like credit cards, can impact your credit score, so you will have to ensure that you make your payments on time to avoid negative impacts. Before you decide on this option, do your research to find out what the interest rate and terms on the loan will be, and be aware of any hidden costs.
Use our personal loan calculator to see how much you could qualify for and what it could cost you.
Managing multiple loans and credit card accounts across different banks can be stressful, but consolidating your debt lets you combine several higher-interest balances into one with a lower rate so you can pay down your debt faster without increasing payment amounts.
You can also use the Balance Transfer feature on our Banking App, which allows you to transfer your personal loan or credit card debt from other banks to your Standard Bank Credit Card. By combining your debt in one place, it helps reduce the amounts of interest you pay.
It is important to review your spending habits on a regular basis, so whichever method you choose to pay off your debt, you should also consider other ways of reducing your overall spending to avoid being stuck in an endless cycle of debt.