How to Pay Off Credit Card Debt Faster?

This might sound like a silly question since one would assume in order to pay off credit card debt faster you could just put more money towards its repayment. However, this isn’t exactly the case. With variable APRs on different credit card accounts there is actually a smart way to pay down debt and a way that can make your money move further. Throwing more money at the problem isn’t always the most effective way to pay off debt and it’s definitely not the fastest way possible. If you goal is to pay off debt as quickly as possible you need to tackle the highest interest rate accounts first.

Debt Snowball Method

The debt snowball is advantageous for consumers that have a lot of different accounts and want to eliminate the accounts as quickly as possible so they can reduce the total amount of accounts. This method will help you achieve your goal by paying off your accounts as quickly as possible (depending on how many credit card accounts you have) but it isn’t always the most cost effective way to indiscriminately eliminate all debt ASAP. The debt snowball method has great psychological benefits and positively reinforces the debt pay down process but it’s also more suited to consumers with many credit card accounts.

Debt Avalanche Method

The debt avalanche method is the most cost-effective way to eliminate debt and therefore also the quickest method to eliminating it. With the debt avalanche method you are paying down the highest interest rate account first indiscriminately (regardless of balance or minimum payment amount). In this scenario you will have the most interest savings possible but you will still have to worry about minimum payments from your other accounts, especially if your larger balance accounts have higher interest rates.

Set a Dedicated Savings Plan in Motion

Achieving your goals in a quick and timely manner isn’t always an easy thing to do. In order to get things done quickly you need to set a plan in place and hold yourself accountable to it. If you don’t it’ll take you a lot longer than necessary. Typically, the easiest way to execute this plan is by setting a weekly savings goal (this could be a monthly or different timeframe as well). If you have a set amount you can save each month from your allotted disposable income put it towards your repayment plan. Whether that’s $50 a week, $100 a week or whatever the case might be you need to hold yourself accountable, set a reasonable goal (so you can ideally surpass it) and let time work itself out.

These two methods are the main ways you’ll be able to pay down debt aggressively and paying a lot of interest with minimum payments is not one of them! In order to pay off your accounts the quick you will want to choose the debt avalanche method. The debt avalanche is the clear winner since it indiscriminately looks to eliminate higher interest rate accounts first. The sooner you eliminate higher interest payments the quicker you will get out of debt and achieve financial freedom.