The average US household credit card debt is $15,607. Credit card debt can wreak havoc on your finances. It’s easy to keep spending when you don’t have to pay anything until the end of the month, which can lead to big balances and a never-ending cycle of debt. If you’ve been struggling to get out of credit card debt, try these methods to get rid of it for once and for all.
Stop Using Credit Until the Debt is Repaid
If you’re having a hard time keeping credit card debt under control, temporarily stop using your credit cards. Using more credit while you still owe money can keep you stuck in an endless cycle where you run up debt and only pay part of it back.
You don’t have to stop using credit forever. Just quit until the debt is paid off. Then, make a commitment to only use as much credit as you can pay back at the end of the month so that you don’t get into trouble again.
Pay As Much as Possible Each Month
If you really want to get out of credit card debt don’t just pay the minimum. Minimum payments guarantee that you will pay large interest rates and financing fees on your credit card. It will take far longer to pay off your credit card debt and you’ll pay much more over time than if you had immediately paid your bill. Instead, get your credit card debt under control by putting as much money toward the balance as possible each month. You’ll pay your credit card debt off quicker and spend less in the process if you do.
Take Out a Home Equity Loan
If you are in dire straits because of credit card debt, take out a loan against your home equity line of credit and use it to pay off your credit card debt. You will still have a debt to pay, but you’ll have more time to pay it and will pay less in interest. You might be able to save even more money by taking a tax deduction on your interest payments.
Consolidate Your Debt Through a Peer-to-Peer Lending Service
Peer-to-peer lenders often offer loans at a lower interest rate than banks do. If you need money to repay credit card debts, consider getting a debt consolidation loan through a peer-to-peer reviewer such as Prosper or Lending Club. With both services you can borrow up to $35,000 and you’ll be able to pay off all your credit card debt and repay the loan at a lower interest rate.