When it comes to paying down debt, it is important to make sure that you are doing what you can — as fast as you can. Credit card debt normally comes with high interest rates, so it is vital that you try to pay it down as fast as possible. The longer it takes to pay down your credit card debt, the more money you waste paying interest. Generally, there are two main ways you can accelerate your credit card debt pay down:
- Cut expenses
- Increase your income
Of course, if you combine the two methods, you will be more likely to pay off your credit card debt even faster.
Cutting Expenses to Pay Down Debt
When you only pay the minimum payment, it drags out the amount of time that you are in debt. Just look at your credit card statement. Your statement should show you how much you will pay total when adhering to the minimum, as well as how much you could save if you pay off your credit card sooner. One way to pay off that debt sooner is to cut your expenses.
Figure out how much money you could put toward your debt pay down if you cut some of your unnecessary expenses. Some of these expenses might be big, such as cutting the cable TV. Most, though, are likely to be small. Cutting small expenses can be done by:
- Taking a bag lunch to work, instead of buying lunch.
- Shopping with a list and only buying what you need.
- Eating out less and making more meals at home.
- Reducing the amount of entertainment you consume.
- Getting rid of subscriptions you rarely make use of.
- Refusing to buy items that you don’t need.
Add up the savings, and put that extra toward your credit card debt. This can help you accelerate your credit card debt pay down.
Increasing Your Income to Pay Down Debt
The truth is that there is only so much you can cut. While you want to pay off your debt quickly, if you cut everything that makes life enjoyable out of your budget, eventually you become discouraged. Instead, consider what you can do to earn a little more. You should still make cuts in your budget to help pay down your debt, but you can rely on extra income to help you pick up the pace a little bit.
There are a number of ways that you can earn a little extra income to help you pay down your debt. You can get a part time job to help the situation, or you can look for ways to generate income a little closer to home. Odd jobs around the neighborhood, plasma donations, and even starting a web site can be ways to generate a little extra income each month that can you can apply to your credit card debt.
Combine your extra income with the money that comes from cutting your expenses, and you can really boost your credit card debt payment. This will also help your credit score. As you speed up your debt pay down and watch the credit card balance drop, you will feel a sense of accomplishment — and optimism that you really can get out of debt.