Millions of Canadians are feeling the weight of significant credit card debt. Many people were forced to rely on their credit cards during the pandemic, creating a debt crisis that can be tough to handle. If you are being crushed under your credit card debt, you are probably searching for ways to find your way towards the light.
While credit cards are a great emergency resource, maxing out your balances can be a dangerous financial choice. With inflated interest rates, and difficulty paying down principal balances, you may feel like you aren’t making any progress with your repayment schedule.
With the right repayment plan and some help from companies like My Canada Payday, you can get out from under your debt faster than you thought possible. Let’s take a closer look at a few ways to pay down your credit card debt quickly.
Create a Budget
It’s important to always view your budget in the context of the bigger picture when creating it. It’s safe to say that one of your goals will be paying off your debt, so make sure that your budget reflects that. First, you need to find out where you currently stand with your finances. Go over your bank statements from the past three months. By adding up your expenses, note where you are spending and how much you are spending.
Cut Monthly Expenses
Cutting all your expenses to pay more towards debt may be tempting, but it’s not always a good idea. Changes can cause you to rebel and wish things were back as they were before. You might want to cut your living expenses to the bare minimum temporarily. See if you can cut any spending from your budget. You may need to cancel some subscriptions and cook at home.
Consider Consolidation
You can pay off your debts without consolidating them in an ideal world. Despite being a viable option for debt repayment, it must be carefully considered. The debt consolidation process involves combining all your debts into a single payment. As with any repayment option, there are both pros and cons associated with it. Negotiating lower interest rates is one of the pros. The con is that you will pay less each month but stay in debt longer.
Choose a Strategy
Most debt payoff strategies use the debt snowball or debt avalanche methods. Pay off your smallest debts first, then move on to your bigger ones with the debt snowball method. You pay off your high-interest debt first, then make minimum payments on everything else. Debt snowballing may not be as satisfying as paying off smaller debts first. By paying less interest over time, you can save more with the debt avalanche method.
Work a Side Gig
You can help speed up debt repayment by earning more money while cutting expenses. Making extra money alongside a primary job has become increasingly popular as more people work side hustles. There are unlimited types of side hustles available. It’s recommended to look at your skills and carefully consider the job that is best for you.
Paying off debt is a priority for most people. These tips will help you get out of debt quickly if you are tired of feeling trapped by your financial obligations.
Disclaimer: This content does not necessarily represent the views of IWB.