LITTLE ROCK, Ark. — The holidays have come and gone, probably as fast as your cash. Some studies have shown as many as 1 in 3 Americans racked up credit card debt this holiday season.
We've got a few helpful tips for you to pay off your credit card debt faster and save money.
Target one debt at a time.
Did you use more than one credit card for holiday shopping? If so, make sure you always pay at least the minimum on each card. After that, focus on paying down the total balance on one card at a time. There are two popular approaches for how to do this.
- The Snowball Method: Pay off the cards with the smallest debts first to get those out of the way.
- Avalanche Method: Pay off the card with the highest interest rate first and then focus on smaller debts.
Pay more than the minimum balance if you can.
If possible, pay more than the minimum on your cards. If you pay only the minimum balance on your credit card, it takes even longer to pay off your bill. If you pay more than the minimum, you'll pay it off faster with less in interest overall.
Analyze your spending by category and cut back.
Use tools like the Mint App to organize your accounts and categorize your monthly spending in different areas. Look at how much you are spending on things like groceries, driving, housing, and entertainment.
(Tip: your credit card statements can be a helpful tool as many automatically categorize your spending). Find areas where you can cut back on spending and then apply those dollars to paying down your debt.