No one wants to be in credit card debt, and it can be a compromising position to be in whenever you are planning for your financial future. You probably dream of owning your own home, having a better car, or setting up a savings account to help your children out in the future. But when you’re in debt, you may find that all of these options are closed to you. There are multiple ways that you can start to eliminate some of the pressures of credit card debt, starting today.
Start by Paying Off the Credit Card with the Highest Interest Rate
If you have credit card debt on multiple credit cards, then it is in your best interest to pay off the credit cards that have the highest interest rates first. This is because, if you wait until your other debts are paid off first, then the interest that will have amounted will be exorbitant and more than you would have had to pay if you had just paid it off first. Many people will not think to utilize this method, because they will see the account with the least outstanding debt and think that that will be easier to pay off than the one with the most.
They also believe that, in reducing the number of debts that they have, this will dramatically improve their FICO scores. While there is logic in this reasoning, it is better to think about the overall amount of money owed rather than the number of debts. It is also healthier for your FICO score to reduce your debt by paying the highest rate so that that is out of the way.
One way to do this, and pay multiple debts simultaneously, is to change the way that you think about paying off your debts. Instead of paying an equal amount of money off on each of your debts, you should pay off your debts in a way that makes sense, such as putting the most money towards the most debt.
As a simplified example, if you put $60 per month towards paying off three credit cards, and one card has 30% interest, one has 20% interest, and one has 10% interest, then it would not be wise to put an even twenty dollars towards each debt. Instead, pay $10 towards the lowest interest rate, $20 towards the middle, and $30 towards the one with the highest rate. That way, the highest interest rate not only gets paid off faster than it would have, but you also have room to pay off your other debts as well.
Get a Side Job to Help Pay Bills
Getting a side job is a good way to help pay off any debt, not only because it will help improve your financial situation now, but it puts you in a place where you have greater access to a brighter financial future. Side jobs can be as short term as one night of watching your neighbor’s kids, or as long term as freelance copyediting for a small business. Either way, when searching for a side job, search for jobs that will add to your resume and give you credibility in your field.
However, if you are just in need of some fast disposable income, opportunities like ride sharing with Über and Lyft also exist to help alleviate the pressures of debt quickly. For more short term side job opportunities, utilize local Facebook groups and Craigslist as platforms to advertise your services and get jobs fast.
There are also ways that your side job can become your full time job, such as if you have any interest in becoming a freelancer or a virtual assistant. Freelancers can work in a number of fields from creative content creation to administration. With platforms like LinkedIn, Fiverr, and Upwork, you can create your own accounts and start networking and creating critical career connections today.
Virtual assistance is a bit different from freelancing in that, rather than setting your own pay and working out your own hours, as you are sometimes able to do with freelance work, the business or individual that signs your contract asks certain hours and offers you certain pay and benefits. Virtual assistance is also good for paying off debts if you would rather work from home, because all you need is a reliable Internet connection and a good computer in order to get the job done.
Take Out a Loan
The method that will take the least amount of time, and allow you to pay off your credit card debt the fastest, is to take out a loan. Depending on your financial circumstances, and the amount of debt that you owe, there are a number of options that you can choose from. One of the easiest options, especially for those people in debt that have lower credit scores because of their debts, is to take out an unsecured personal loan. This means that the loan is not protected by collateral in the event that you miss payments on the loan, so it is a higher risk for the financial institution.
These loans, often called credit card consolidation loans, often have lower interest rates than the credit card debt itself, so they take months less to pay off than the credit card debt would have been, which can help you start to rebuild your credit faster.
Taking out one of these unsecured personal loans can also help you keep your debt payment plan in order. Rather than paying off multiple debts at multiple different times, you just have to pay one single debt collection agency, and then your worries are over. Even if taking out a loan sounds like a hassle, it can be a good option for those who are looking to pay off their debts faster, and with a much lower interest rate than before.
All three of these paths can help take you to the road of financial freedom and liberty from credit card debt. These options can help you improve your credit score and eliminate the pressure of debt, which will help you be able to achieve any financial goal that you set for yourself.