9 ways to pay off credit card debt
Late credit card payments are on the rise. The Consumer Financial Protection Bureau says delayed payments increased in 2019. Every year, some Americans struggle to recover from holiday spending, and it can start a downward spiral into debt.
Cheryl Kastner is the director of consumer lending at INTRUST Bank. She says late credit card payments can have some of the biggest impacts on your credit score. Kastner says consistent, on time payments can be just as helpful as paying off debt completely.
Make a budget and stick to it. Kasnter says everyone should make a budget and know how much they can spend per month.
We spend a lot of money without realizing it. With automatic withdrawals, we can forget about subscriptions we don't use anymore. Even if they're only five or 10 dollars, cancelling unnecessary subscriptions can give you more money to put toward credit card payments.
Kastner says borrowers can save money by eating at home more often, and putting the savings toward a debt payment.
If you get a tax refund, Kastner recommends putting it into an emergency savings fund. If you do have an unexpected medical bills or car trouble, you can pay it off from savings, and not on the credit card.
If you want to pay off your debt completely, Kastner recommends starting with the smallest balance. Once it's paid off, move to the next smallest balance. She said you will adjust to making the payments and working toward the largest balance has a snowball effect.
Kastner says if you have a hard time remembering which credit cards you used, and which ones need paid off, you have too many credit cards. She says having two or three makes it possible to closely monitor activity and payments. Having too many makes it easier to miss due dates.
Stores and airlines offer perks and discounts to its card holders. Kastner says they aren't bad as long as the cardholder remembers to pay it off. She says the bills don't come through on email from the store, but rather, the credit card company. It can be easy to over look and delete it. She says you should give yourself some kind of reminder to pay the bill. "It's too easy to go into a retail store and they go, 'well you have a card with us, let's just put this purchase on there'. You do it, and then you forget it, and that's the payment that goes late," Kastner says.
Kastner recommends setting up auto payments for credit cards so you don't risk missing a payment.
Card companies can help stop fraudulent charges before they happen through text alerts.