Looking to reduce credit card debt fast? Any effort to quickly get out of credit card debt fast makes sense, if you’re struggling with that debt. The faster you pay it off, the better your credit. Also, the faster you pay it off, the sooner you can enjoy debt-free living.
But paying it down fast may not be your best goal. You have to also find ways for paying it down as cheaply as possible.
The cheapest way to reduce credit card debt isn’t the same for everyone. It depends on your balance, your interest rates and your assets. Let’s take a look at a few ways to reduce credit card debt.
Use Your Savings
Do you have a savings account? Take a look at the amount of interest you’re earning on your money. Now take a look at the amount of interest you’re paying on your debt. If you’re paying more than you’re earning, consider cashing out your savings to cut your credit card debt.
Save money or pay off debt? It’s wiser to wipe away your debt first and then focus on rebuilding your savings later, once you’re not making monthly credit card payments.
Get a Debt Consolidation Loan
Can you qualify for an unsecured consolidation loan? If so, at what interest rate? Compare the interest rate of a loan compared with the interest rate you’re paying on your credit cards. Most often you’re paying credit card companies much more than you’d be paying your bank.
That being said, make sure once you’ve paid off your credit card debt that you cut up those cards. If you run up a balance on them, then you’re paying back a loan and paying on your credit cards.
Borrow from Your Home Equity
Home equity loans can be an option depending on the market, how much equity you have in your home and interest rates. Additionally, a portion of the interest you pay on a home equity loan is tax-deductible. However, like a debt consolidation loan, you’re in danger of running up your credit cards again and paying on two loans simultaneously.
Find Other Sources of Funds
If borrowing from friends and family isn’t an option or you don’t have savings to reduce credit card debt, consider taking drastic measures. These includes taking a second job or picking up some freelance work. You could also sell some valuables like your car and move into a cheaper apartment if you need to.
No matter what method that you use to reduce credit card debt, consider cutting back on your expenses and paying more than the minimum balance on your card each month. This is often the fastest and the cheapest way to pay off your credit card balance.