September 15, 2021

5 Tips for Paying Off Credit Card Debt Faster

Why you should pay off your credit card debt and some top tips to get it done faster.

7 min read

Qoins Staff

@qoinsapp

Why Pay Off Your Credit Card Debt

Before we get into the 5 tips for paying off credit card debt faster we should begin with why you should! American owe over 800 million dollars worth of revolving credit card debt in 2021, revolving meaning a consumer carries a balance from one month to the next. By ignoring your credit card debt, you income is drastically consumed by high interest payments that simply do not get you out of debt, they're meant to keep you in debt. So being aggressive with your credit card debt pay off will free up more of your income to put towards other types of debt, a downpayment on a house, or save for retirement. Did you know that just making an extra $50 payment above your required minimum payment on a typical credit card will reduce the time to pay off from 21-23 years to just 3-4 years? This is the danger of minim payments, it's just enough to seem simple to make, but is designed to hold that balance for as long as possible. Now, let's get into the tips!

1. Organize the debt

Organize all of your credit card debts in one easy to track place where you can measure and see your progress. Include the balance, the interest rate, and the payment due date. Once you have accomplished this add up all of the minimum payments that must be made each month, and subtract that from your monthly income. The difference is the capital that can be used to aggressively focus in on one of those cards to pay off. You can choose the card with the smallest balance for a quick win or you could choose the card with the highest interest rate for the greatest interest savings.

2. Pay More than the minimum

Take a look at your credit card statement, they're required by law to supply you with a payoff timeline if you only make the minimum payments. Why? Because this tool that they've developed called the minimum payment has impacted millions of consumers, and holds them in debt for decades... by design. Each dollar paid over the minimum requirement goes directly towards you balance, so even if it's $10 or $50 per month, you're making significant strides towards paying off your credit card debt years before. Apps like Qoins help you do that, our average customer that just rounds up their daily transactions sends an additional $58 per month towards their debt. This can be the difference between a 21 year pay off schedule and a 3 year pay off schedule. Small change really does add up when looking at credit card debt.

3. Use a Debt Repayment App

Qoins is designed to work with your plan to pay off debt 8x faster than alone. How? By automating your plan to continue to work which takes out the psychology behind money. If for example you're setting aside 10% of your paycheck each month towards your debt, it's money that you never see that's automatically sent towards your credit card debt. As we like to say if you don't see it, you don't spend it! Automating your debt-free journey is a major hack, and the best part is it's 100% customizable. If for example, the holidays are coming around and you need to free up some holiday gift money, than you can adjust your contributions accordingly, while still making some progress towards your goal. Qoins is a secret weapon you can use to simply speed up the process. We've also got great options if you find yourself in a situation where you need to consolidate debt.

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4. Pay Off the Balance with the Highest APR

This would be similar to the avalanche method where you zero in on the highest interest credit card first while making the minimum payments on all other types of debt. This method will save you the most money and time. For example, let's say you have 3 credit cards with minimum payments of $120 (24% APR), $50 (21% APR), and $270 (18% APR). You pay $250 on the first card which includes the minimum payment of $120, while making both of the other minimum payments on the other 2 cards. You repeat this process until that first credit card is paid in full, and you can then bring that $250 payment up to $300 to pay off the card with a $50 minimum payment since you no longer have the first card's minimum payment to account for. As you can see which this approach, the momentum builds and builds quickly as soon as you have your first debt paid off. With this strategy however, you have to begin with a plan of how much you can afford to put towards these debts per month. This will guide how aggressive you will be on the additional payments.

5. Be Realistic

Regardless of how much credit card debt you have, making a $5,000 contribution in one day may not happen. You can cut costs, you can hustle, and even take up another job. But you have to set a plan that is realistic, and one that you can follow through. Do not live on nothing for 2 weeks and then force yourself to give up because your approach was too aggressive from the start. There's no shortcut, but with a plan that you stick to it can be done sooner than you've imagined.

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