Paying your debit card debt can be a real pain in the head. Having a credit card lets you feel, you have hundreds of dollars to spend but it can cause a dent on your loan. But once you have paid your bills then you will have that money available to spend on other things. So, where to start when you are ready to pay off your loans. If you are looking for a personal loan then Myinstantoffer Pre Approval Personal Loan is one of the best lending clubs.
So, you have gathered the money and now ready to pay back your credit card debt. Then it is time for you to plan a strategy to pay your debt successfully. But what if you do not have any strategy? Then we are here to help you out. Take a look at following key areas:
- Mistakes You Should Avoid
- A strategy for paying back
- A simple way to low your interest rates
The first thing that you must have is money and it depends on you how you are going to arrange. You can sell the things, you do not need or you can do overtime to earn some extra money. It is always good to have some extra money in hands. You can use this extra money to pay off your credit card bills.
The Strategy
Next thing is to make a strategy for paying back you owe to credit card company. You can do it by using the extra money you have to pay off the bills. This not only helps reduce the debt but also improve your credit score. There are normally two strategies which are as follows:
Debt Avalanche
In this strategy, you focus on paying the bill with a high-interest rate. This approach is very good in case you have bills with high-interest rates. Suppose you have two credit cards and each one has a different interest rate. Then choose the credit card which charges you high interest-rate. The main goal of this strategy is to pay the loan with less interest rate. Sometimes, it looks like the strategy is not that good. But if you use it, you will see that you paying less interest rate on average.
Debt Snowball
In this approach, you start by paying the shortest bills and then the big bills. Step by step, you reduce the debt. Suppose you have two credit cards, the balance of first credit card is $1500 and the second one balance is $500 dollars. Then start by paying off the second credit card and then go for the first one. This is one of the best methods to pay off your credit card bills. A recent study shows that most of the people use this approach. Because of thy feel is more comfortable by paying off the small bills.
These were the two methods, you can choose either one that best suits you. The main purpose is to pay off your credit card loan on time. We will recommend you to go for debt avalanche as this approach makes more sense when we are talking about the interest rate. If you are still not comfortable then you can pay for debt snowball.
Best Alternatives to Credit Cards
Normally, credit card companies charge high-interest rates compare to other alternatives. If you are getting a better offer with less interest rate then you can combine all of your loans into one. There are many alternatives to consolidate your credit card loans such as unsecured personal loans, Peer 2 Peer Loans. But you must have a good credit score to qualify for the alternatives. We personally recommend you unsecured personal loans as they charge less interest rates and you do not need any collateral.
Peer 2 Peer
It is a type of loan, in which you borrow money from an individual through an online P2P platform. If you are in a hurry then this is the fastest options for loan approval. The interest rate normally depends on the interest rate and the chances of approval.
Banks and Credit Unions
Getting a loan from a bank with lower interest rates than credit card is the best alternative. Compare to banks, credit unions are less expensive and the chances of approval are higher.
