Eliminate credit card debt
Follow these tips to smartly plan out your debt payments.
Get strategic about managing your credit
1. Create a budget and track your progress
First, plan to attack your debt strategically. Plan out how much you’re able to pay each month and weigh that against your income, expenses and other financial considerations. Update and change this plan as needed, and add or revise goals as you go. Then, keep track of the progress you make.
2. Consider other forms of payment
Responsible use of credit cards, combined with timely payments, can help build credit history. That said, sometimes it's important to use other types of payment to better manage your budget. Consider using a debit card for some purchases. You still get the benefits of tracking your spending when the purchase shows up on Bank of the West Online Banking, mobile app and statements.
3. Double up on payments
Can you pay more than the minimum due without compromising your basic living expenses and your emergency fund? Paying more than the the minimum amount due is a great way to make progress in lowering your debt over time. For example, consider paying double the minimum amount due, or pay the minimum again in two weeks, at the midpoint between monthly bills.
4. Attack the highest interest rate
If you can pay most or all the debt on one of your multiple cards, pick the card with the highest rate and pay that one off first. Paying down the card with the highest interest rate means eliminating debt that can potentially compound the fastest. Do this gradually, and keep enough of a cash reserve to avoid running out of money. Be sure to leave enough room in your budget to pay the minimums on your other cards.
5. Draw on the card’s benefits
Every credit card comes with different features like introductory rates, a low interest rate after the introductory period, or benefits like rewards points or cash back. For example, some cards offer "price protection", which protects you if you buy an item, and the cost of that item goes down within a period of time. If this happens, you can get a refund. This feature can potentially lower you payments and help you pay down your debt. When examining the benefits of any new or existing credit cards, be sure you’re using your card wisely
For informational purposes only and is not considered legal advice.