Finance & Loans

A fresh look at paying off credit card debt

Interest rates on many consumer loans are at a historic low. But it is not true for credit card debt. Interest rates on credit card debt could vary, but stay between 10 to 30 percent and most paying at the higher end. Here is a fresh look at paying down your credit card debt.

1. Understand how they work
They are designed to spend your hard earned and yet to be earned money. They can keep you in debt for a long time or if you don’t plan, for forever. It can trap you with an everlasting minimum payment. Understand how bad the word “revolving” is and try to break the habit.
2. Develop a plan of attack
Arrange your credit card debt from highest interest to lowest. Concentrate paying off balance with the highest interest rate first because it can save you money. Make sure to pay at least the minimum payment of cards as well. Once you paid off the highest interest rate card, store it away and move on to the next.
3. Curtail your habits
Treat your credit card as your emergency fund and use it only in an emergency. You should not charge your day to day expenses on your credit card.