Of course, the faster you pay off credit card debt with as little cost as possible the better. But which method is the fastest? Which is the cheapest, and can you get both benefits at one time? Find out here!
We are America and we have an addiction. We live beyond our means, spend unconsciously, do too much therapy shopping, live the “swipe it and forget it lifestyle,” use whatever colorful phrase you like.
The 5 Cheapest Ways To Pay Off Credit Card Debt Fast Getty
America’s addicted to living on loans.
American’s passed two milestones in 2018. The first is we, as a country, exceeded $1 trillion in credit card debt. As we know that credit card transactions don’t stop after we swipe our credit cards, it gets worse.
Consequently, Americans paid $104 billion in credit card interest and fees for the twelve months leading up to August 2018. That’s $823.96 in interest and fees for every household in the U. S. with a total of 126.6 million households. That’s $823.96 just for the privilege of carrying $1 trillion on our collective credit cards. To be sure, approximately half of those households don’t carry credit card debt. That, which means, the rest are getting hit hard.
What would you do with $823.96? It’s not a lot of money but consider that the average American can’t afford a $400 emergency. A moderate amount of leverage can be good; however, Americans are over-leveraged and it’s hurting marginalized communities hardest.
Take, for example, that the average LGBTQ family carries $12,065 in credit card debt while the average family in the general population carries $10,400 in credit card debt. That same study, the State of the American Family Survey performed by MassMutual, also found that the average African American family has $10,615 in credit card debt. While that’s close to the total of the general population, the survey found the credit card balance for African American families particularly challenging considering the survey’s findings of this demographic’s average household income. Even with the higher average incomes, the average affluent American reported currently carrying $11,000 on credit card debt.
While most Americans have no problem paying 20% interest or more on the cheapest of purchases, they balk at paying for help with paying off their credit cards. Unfortunately, many don’t succeed without accountability, coaching and a step-by-step support system.
For those who want to go it alone despite it being a recurring New Year’s Resolution and with the wealth of information on the internet, these five strategies for paying off credit card debt are for them.
1. The Snowball Method
A rolling snowball gets progressively larger. Such is the strategy of the Snowball Method for paying off credit card debt. With the Snowball Method, you’re paying off your credit card debt from the smallest balance to the largest balance all while making minimum payments on your other debts. Once your smallest balance is paid off, you pay off your next smallest balance using the money that’s no longer going toward your credit card with the smaller balance.
