does paying off a credit card get easier as you pay it down

#Does paying off a credit card get easier as you pay it down free

If you are earning interest at a rate of 3% but paying interest on credit card debt at 18%, your debt will be climbing faster than your earnings. Note: Money in a high interest savings account might stop accruing interest when you take it out to pay off debts, but it could be for the best. Other ways to consider adding in some extra funds might be selling off some unwanted goods online or adding in some freelance work. If you’ve got any money set aside (think gifts, savings, or that little boost from your tax return), it might be time to think about where it could be better used. Have some extra cash squirrelled away? It might be time to bite the bullet and put it toward getting rid of your lingering debt. You might have to tighten your belt when it comes to your social spending, but breaking down debt is all about keeping to the basics. Once you get money sorted for the essentials, allocate the rest of your budget to paying down your debt. Put aside money for these things first - it won’t do you any good to make a big repayment on your credit card, only to find out you haven’t left enough to pay your rent. Start by working out your monthly income, and then identify all your necessary expenses: rent or home loan repayments, regular bills and utilities, groceries and petrol. Once you’ve committed to paying down a credit card debt, it’s time to create an airtight budget. The last thing you want to do while paying down credit cards is build up more debt, so we’d definitely be saving those for when you’ve got things under control. While you’re focusing on paying off your debt, the last thing you want to do is stack more on top of it.įor the moment, it’s time to take those cards out of your wallet. Set a realistic goal that you can stick to to prevent yourself from getting discouraged. Next month I will pay $20 more than the minimum repayment.” It can be long term - “I will pay off all of my debt in the next three years” - or short term - “This month I will pay $10 more than the minimum repayment. If you have multiple credit cards, prioritise them in terms of which needs to be paid off first (or consider bringing them together into a debt consolidation loan).

#Does paying off a credit card get easier as you pay it down free

The first step of breaking free from credit card debt is working out exactly how much debt you have. To make that process a little easier, we’ve put together a step-by-step guide to help you with getting out of debt and staying out of debt! Step 1: Set your goal That doesn’t mean it’s not worthwhile - in fact, we guarantee that getting free from that credit card debt is worthwhile. Shaking loose your credit card debt can be time consuming and impact every aspect of your life. We’d love to sugarcoat it, but paying back credit card debt isn’t a sweet thing. It’s easy to fall into by accident, and it’s anything but easy to get out of.