The 2019 year was hard for many people. The work market has fallen rapidly, restrictions make it impossible for most of us to survive, there are lots of exciting debts and new ones that require payments and so on. Even though in 2022, many things have been improved, half of the population still has to pay debts every month. While some were able to find a job that could easily cover all these expenses, others struggled with the question of how to manage money and how to pay it off faster and not stress about it anymore.
If you are one of these people who still carry credit card balances month to month, we are happy to inform you that paying off that debt fast may be easier than you think. The key here is to learn some strategies, choose the one that suits you best and stick to it. These strategies we explain below can help you decide on what to focus on and what plan to create, allowing you to quickly pay off any credit card debt.
Target One Debt at a Time
If you carry more than one debt, then the first thing is to divide them and pay at least the minimum each month. Then you can focus on one (usually the biggest) debt and try to cover it as much as you can. You don’t need to forget about the rest, but focusing on one while still paying at least for each can help you faster pay off everything.
Focus on High-Interest Debt
Every debt has its own interest rate. And you don’t want to pay these interests within time, so focus on the highest one. This will help you avoid unneeded spendings that will be required within time and save money for the rest of your debts.
Pay More than the Minimum
If you always pay the minimum balance on your credit card, it will take you much longer to pay off your bill. We know that it can be hard to pay more than the minimum each month, but try to pay x2 sometimes to make it faster to pay off the whole debt. The card provider should chart this out on your statement, allowing you to see how it applies to your bill.
Make Bi-Weekly Payments
Instead of paying every month, divide the payoff into half payments every two weeks. There are several benefits of this approach, including:
- Since you pay more often, you will get lower interest;
- Following this approach means you will make 26 half-payments each year. This creates an extra full payment on the year, therefore reducing the life of the loan. For example, when you use this strategy with a 35-year mortgage, you can shorten it to 31 years!
Use Specialised Apps
Today, we all live in a highly digital world, and technology provides us with lots of products that can help people manage money easier and quicker pay off their debt. You can use credit control software which has been specially designed to allow users to bring all their accounting, communication, and payment systems into one place, which streamlines their credit control.
You can also start using various applications and platforms that help to customise the bank account, making it visually appealing and user-friendly. Visualisation has been shown to significantly help you better understand your payment patterns and help you faster pay off the credit.
One of the best ways to faster pay off the debt is to refinance. For instance, this might resonate when the interest rates have decreased since you took out your loan. It can also make sense if your credit has improved dramatically.
It’s worth noting that this method will work only when you choose the right approach for you. You can achieve this by reducing the life of the credit, which perfectly works with lower interest rates. If you need to know how to refinance your money, you can also reap the benefits of technologies and consider exploring accounts receivable automation benefits to understand how it can help you in achieving your goals.
Round up Your Payments
If you have to pay $320 each month to pay off the debt, round up this amount to $350. This won’t become a great problem for your budget, and you won’t even notice this extra spending. However, it can help you speed up the process of paying the debt without sacrificing the quality of life. For even a bigger impact, consider increasing your payments to the nearest $100. Experiment with the amount, and you will find what suits you best based on your budget and life needs.
Increase Income & Put Extra Money Towards the Debt
The last but not the least option is to increase your income to put all the extra money towards the debt. There are numerous ways you can create either a passive income or take a freelance job, like selling stuff on Amazon, going to Upwork to find a new job, working on other marketplaces or investing in cryptocurrency.
Even a job will give you an extra $200 each month, and you will put it into paying off the debt; this will make a significant difference and help you speed up the process.
Debts are a common way to make big purchases. And after COVID-19, the number of people who have got credits significantly increased due to many issues that appeared during the last few years. As a result, many people now struggle with these loans and want to know how to speed up paying off the debt. This article shows you several most effective techniques that may help you choose the best option for you and learn how to pay your debt faster in this modern world.