Pay off your credit card debt faster with these tips and ideas.

Too many people think that using a credit card is like using free money.

As a result, they quickly build up piles of credit card debt with no real plan to get rid of them.

Is it possible to get out of that debt faster?

Absolutely, YES! Let look at a few suggestions:

Never Pay Just the Minimum Payment

Minimum payments are typically about 2% of the outstanding balance. The credit card company actually wants you to pay just that minimum every month. The longer you take to pay the balance off entirely, the more interest money they make off of you.

Some Facts:

• If you pay just the minimum payment every month and never incur any more debt, it will take you around 20 to 30 years to pay off that balance, costing you thousands in interest.
• Minimum payments are only beneficial for the credit card company. The longer you pay on that card, the more they make. In essence, the credit card company profits off of your shopping activity.

  So a $100 vacuum cleaner can cost you easily quadruple that amount over a 24 month minimum payment plan.

The lesson? Pay more than the minimum all the time. If your minimum is $10 a month, send in $25. This will speed up the pay off greatly.

Have Fewer Cards

It won’t make sense if you try to pay off one credit card faster while charging your buns off on another card. So look over your cards and review the terms.

If you have one with a lower interest rate, one idea is to transfer all the balances to that card. Now you have a single payment to worry about instead of several. You are also paying a lot less interest than you were.

A good rule of thumb is to add up all the payments you would have made and send them all to the single card. Doing this will probably negate that balance in about a year, possibly less, depending on the amount of money you are dealing with.

The main idea is this: Weed out the cards that have the worst terms and have less cards available for use. Temptation is the enemy of reason.All you need to do is remove the temptation and the means to give into it.

The Snowball Effect

This is a faster way to reduce or eliminate your credit card debt. This is often referred to as the debt snowball method. Take out all your cards.

Now, for each one, write down:

• the balance owed
• the interest rate
• the minimum payment amount

Then:

• Prioritize the cards from the highest interest rate to the lowest interest rate.
• Add all the minimums together. This represents how much you would spend in any one month. Now add 10% to it.
• Target the card on top of your list. Pay the minimums on all the cards except the top one. This card gets whatever is left.

When the top card is paid off, remove it from the list and do the same thing with the next card and pay that one down to a zero balance.

This is called “The Snowball Effect” and can get you debt free faster than paying minimums for many years. All it takes is a little discipline.