How To Payoff Credit Card Debt Quickly

How To Payoff Credit Card Debt Quickly – Typically, you cannot pay off the entire balance of one credit card with another credit card if you move the debt from one card to another. This process is called a weight transfer. Although this method can work in some financial situations, it does not make sense for everyone. Because shifting debt from one credit card to another may be a bad idea for your individual financial situation, you should weigh your options and consider other methods to pay off your credit card balance equally.

This post discusses whether you can pay off one credit card with another and provides other options for paying off your credit card debt.

How To Payoff Credit Card Debt Quickly

In some cases, you may be able to pay off one credit card with another credit card using a balance transfer. Balance transfers allow cardholders to transfer an outstanding balance from one credit card to another, often for a fee.

How To Consolidate Credit Card Debt

Credit card issuers often offer introductory periods for new credit cards that include interest-free or low APR transfers, giving you the opportunity to consolidate your debts into a single account.

Although this is an indirect way of paying off one credit card with another, you should carefully review the terms and conditions before choosing this route. Introductory periods are limited and you may have to pay a high interest rate after the period ends.

Credit card companies generally require that you meet certain criteria for a balance transfer, including good credit. If you have bad credit, you may have a hard time qualifying.

Furthermore, the approved credit limit may not cover the amount of your debt. Because lenders have different requirements and terms, you should shop around and check the requirements and terms of different credit card issuers before applying for a balance transfer card.[2]

Top 5 Ways To Pay Off Credit Card Debt Faster

To determine whether a balance transfer will save you money in the long run, you need to do the math.

Let’s say your current credit card has an APR of 20%, your balance is $2,500 and you pay $250 a month. It would take 12 months to pay off your debt and you would pay a total of $2,758, including $258 in interest and fees.

Assume that the new balance transfer card has an APR of 5% (assuming the initial 0% APR ends after 12 months), including the 5% balance transfer fee, and you pay $250 per month. It would take 11 months to pay off your debt with a balance transfer and you would pay a total of $2,625.

In this case, it may be worth transferring the credit to a new card. In addition, the calculation assumes that the new card has no annual fee and the introductory APR is 12 months. The introductory phase of weight transfers can last as little as 6 months. Be sure to take this into account when making your calculations.

This Chart Will Tell You Exactly How Long It Will Take To Pay Off Your Credit Card Debt

Because cards and issuers have different approval requirements and credit limits, you should shop around for the best balance transfer credit cards for your unique situation. Forbes’ balance transfer calculator can help compare options.

While you may be tempted to pay off your debt with a cash advance on another card, these cash advances often come with a high price.

In addition to paying an ATM fee and a cash advance fee, you may have to pay a higher APR on your cash advance than you would on regular purchases. Because cash advances can increase your debt, you should only use them as a last resort in financial emergencies.[5]

Instead of opting for a balance transfer or a cash advance, you can also consider other options to get your personal finances in order.

How To Pay Off Credit Card Debt Fast In 2021

If you’re in debt and feel like you can’t handle it alone, the following services can help you take back control of your finances.

If you have good credit, you may consider taking out a personal loan to pay off your credit card debt. This idea makes sense if you take out a personal loan with a lower interest rate than your credit card.

However, this can lead to further debt if you don’t handle your finances responsibly. In addition, personal loans may incur additional fees and an interest rate that depends on a number of factors, including your credit score, information in your credit report such as late payments or fees, the loan amount and the loan agreement.

Before you decide to take out a loan to pay off your credit card balance, you should consider the following factors:

How We Paid Off $20,000 In Credit Card Debt

Instead of simply reversing debt with balance transfers or personal loans, you can tackle your credit card bills with the following strategies. You may also want to think about whether you should pay off debt or save money, perhaps by setting savings goals or working part-time jobs.

If you have a lot of credit cards with unpaid balances, you can start using the debt avalanche method. The debt payoff strategy suggests paying off the card with the highest interest rate first before moving on to the card with the next highest APR.

By focusing on high-interest credit cards, you can avoid accumulating more debt (in the form of interest expenses) while trying to reduce it.

When deciding which debt to pay off first, you can also try the snowball method. With this repayment strategy, you pay off the card with the lowest balance first to eliminate the smallest and largest debts.

How To Pay Off $10,000 In Credit Card Debt

While either approach can help you pay off your card balance, the snowball method can help you build momentum and stay motivated while checking debt off your list.[7]

Although you will need to make at least the minimum monthly credit card payment, paying only that amount can leave you in debt for much more. You’ll even find a warning on your credit card statement: How long will it take to pay off your balance and how much interest will you pay if you only make the minimum payment? You can reduce your debt faster—and pay less interest—by finding a way to pay more than the minimum each month.[7]

While you can pay off a credit card indirectly with another credit card through a balance transfer, it doesn’t always make sense. You may want to consider other methods that will help you reduce your debt more effectively.

To get on the right financial path, there are tools and information to help you understand how to build or rebuild your credit score.

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Ana Gonzalez-Ribeiro, MBA, AFC® is an Accredited Financial Advisor® and a bilingual personal finance author and educator dedicated to serving populations in need of financial knowledge and advice. Her informative articles have appeared in various media outlets and websites including Huffington Post, Fidelity, Fox Business News, MSN and Yahoo Finance. She also founded the personal finance and motivational website www.AcetheJourney.com and translated the book “Financial Advice for Blue Collar America” ​​by Kathryn B. Hauer, CFP, into Spanish. Ana teaches personal finance courses in Spanish or English on behalf of the W!SE (Working In Support of Education) program and has taught workshops for nonprofit organizations in NYC.

Our goal is to provide readers with current and unbiased information on credit, financial health and related topics. The content is based on research and other related articles from trusted sources. All content is written by contributors with experience in the financial industry and reviewed by accredited individuals.

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By submitting my information, I agree to the Terms of Use, Consent to Use Electronic Documents and Signatures, Privacy Policy, Consumer Reports Disclosure and Customer Identification Program. 5 Ways to Pay Off Credit Card Debt Faster Posted in Financial Management, as of October 7, 2015 | 0 comments

How To Pay Off Your Current Credit Card Debt With A Balance Transfer Card [infographic]

They call the credit card “plastic money,” which is absolutely true because once you default, the card looks like a useless piece of plastic. Why are people so fascinated by using credit cards when they know very well that using them has serious consequences? Only when you are sure that the payment will be made within the one-month billing period, do you decide to pay by credit card. Otherwise, it is wiser to spend with what you have available.

Read this post that highlights the downside of credit card debt and also shows you how to get out of it!

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