For instance, if your credit card debt is ,000, your interest rate is approximately 17 percent, and you make a minimum payment of 0.00/month: It will take you 135 months to pay off that card, or a little over 11 years.
During that time, you'll end up paying over ,000 in interest, over and above the ,000 principal.
Debt consolidation does not pay off your debt -- it simply shifts it.
If you qualify for a balance transfer credit card, you can also transfer a high-interest credit card debt to a card that offers 0% intro APRs, so you have a year or more to pay down the debt without interest.
If you can't qualify for a balance transfer card, look at repairing your credit to help you qualify.
Now you can see why getting those cards paid off sooner rather than later make a lot of sense.
Strategy 1: Paying Off a Little Extra Every Month The most straightforward method to getting out of debt is to simply pay more than the minimum due, every month.
However, if you pay $400/month on the same card, it will only 54 months, and you end up paying just $6,545 in interest.
Now granted, an extra 0/month isn't a trivial amount. Because, by law, minimum credit card payments are defined as that month's portion of the annual interest due, plus 1 percent of the principal.
Paying the Minimum Can Double Your Debt Answer this question honestly -- do you pay extra on your credit card bills, or do you stick to minimum payments every month?
If you're like most people, it's probably the minimum.
Strategy 2: Divide and Conquer If you're like most people, however, you have more than one card -- in fact, the average American has 3.7 credit cards.
And all these cards typically have different interest rates and balances.
It also dramatically shortens your timeline to pay off your debt because the extra payment goes straight to the principal.