Q:

How do you pay off credit card debts?

A:

Quick Answer

Paying off a credit card debt requires implementing one or more strategies such as paying off one card at a time or consolidating all debt into one payment. Another strategy is to pay more than the minimum amount each month.

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Full Answer

Go through all of the credit cards, and check interest rates. A good way to begin paying down this debt is to start with the cards with the highest interest rates and work down from there. For example, a card with a 20 percent interest rate should be paid off before one with a 15 percent interest rate. If the goal is to pay off all cards faster, this is achieved by making higher payments that go beyond the minimum amount due each month. Therefore, instead of paying the minimum amount of $50, paying $75 or more each month speeds up the repayment process.

Debt consolidation is an alternative method that combines all credit card debt under one payment umbrella. In this scenario, the entire debt is usually transferred to an account with a lower interest rate. Payments are made on this consolidated debt until the balance is eliminated.

Contacting credit card companies and negotiating reduced payments is another option. Consumers can contact the National Foundation for Credit Counseling for advice on budgeting and debt management.

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