How to Clear your Credit Card Debts Faster?

Sometimes, it becomes pretty overwhelming to pay off credit card debts. Not only do you have a financial burden on your mind but it also leads to anxiety and stress. 

As of July 2021, the average credit card debt of an Australian was estimated to be about AUD 37,429. 

If you have also fallen into this big pit, then there are ways to get yourself out of it. Here are a few tried and tested methods of clearing your credit debts faster.

1. Make a list

While this won’t actually clear your debts faster, it will certainly speed up the process of repaying your debt collectors. 

If you have a clear list written down, you can easily check how much you owe to each organization or person. 

Write down the amount you owe for each credit card and then write the interest rates that you have to pay in addition to the debt amount. 

Next, make a similar list of the minimum amount that is due every month, as well as the payment dates for every repayment. 

You can either make a handwritten list or create a digital one using spreadsheets. Go over this list thoroughly to give yourself some clarity about the situation.

2. Pay more than the minimum

It’s always a wise idea to pay off more than the value of the minimum outstanding amount of money. 

For this one, you can even consult an expert in credit mediation debt negotiation and they will also tell you the same!

This way, you’ll not only repay your debts faster but you’ll also save up a lot on interest. The important thing here is to consistently pay off more than the minimum amount every month. 

In some banks or organizations, the people concerned will tell you that the extra money that you’re repaying will go toward the principal. 

Therefore, before you start to repay your debt amounts, carefully go through the terms and conditions provided.

3. Negotiate with your bank

If you have a single credit debt to repay to your bank, you can try to negotiate with the branch managers there. 

For example, if your credit score has always been high and you’ve been a responsible person, then there’s no reason why the bank authorities won’t consider one unexpected incident. 

However, for this tip to work, you need to prove to the bank that your payment history has always been flawless. You must also show that you’re their long-standing customer. 

If your credit score is low or you haven’t paid off quite a few outstanding debts, then you don’t have much chance of succeeding in negotiation. Even then, try to keep calm and explain your situation.

4. Do the snowball method

One very common method that people use to clear debts faster is by implementing the snowball method. 

Here, you have to first repay the smallest outstanding balance among all your debts. After clearing that debt, it’s time to roll the same payment toward the next-smallest balance on your list. 

This way, you can gradually move up to the largest amount and clear all your debts in a shorter time. Well, you can consider a debt collection in Vietnam to ensure that your method suits your financial situation.

The good thing about the snowball method is that even though it’s gradual, it does work. Moreover, if you begin by taking small steps, you won’t feel frightened or overwhelmed while paying off the larger amounts later.

5. Minimize your expenses

This is quite obviously one of the easiest and fastest methods of clearing any debt. 

Suppose you already have a large sum of money that you need to repay. But instead of being financially responsible, you’re spending unnecessary amounts of money. This will only again land you in credit debt. 

To deal with this, first cut off all forms of extra expenditures, such as magazine subscriptions and luxury shopping. 

Next, try to pay for the essential expenses through cash instead of credit cards. Here too, you can make a list of all the areas where you feel you’re spending a lot of money. 

See the areas where you can afford to cut down costs and the ones where you have to remain fixed.

Over to you

Even though credit card debt can be a scary thing, following the above tricks will make your life a little easier. Now that you know how to clear your debts quickly, remember to be financially mindful and responsible.