Are you ready to tackle credit card debt in 2019? If this is the year you plan to become debt-free, you can begin by reading about these useful and effective methods to eliminate debt.
1. Make more than minimum payments
If you are only dealing with a couple thousand in debt, your New Year’s resolution should be to handle it on your own by making more than minimum payments. When you’re only making minimum payments, you’re mostly paying off interest rather than what you actually owe, which means you’ll end up paying much more in the long run. Putting extra cash toward your accounts at the end of the month can help you get out of debt a lot faster. Two effective do-it-yourself ways to eliminate debt are the Avalanche and Snowball methods.
If you’re dealing with one or two accounts with high interest rates, the Avalanche method might work for you. With this method, you target the account with the highest interest rate first while making the same minimum payments on your other accounts. After paying off the highest interest account, simply move on to the account with the next highest rate. Using this method, you could save more on interest and get out of debt faster.
If you have multiple credit card accounts with similar interest rates, the Snowball method may be your best option. With this method, you’ll focus on paying off the smallest individual accounts first, then work your way up. After eliminating the account with the lowest debt, move on to the next and repeat the process. This way, you’ll end up with fewer accounts to worry about.
Even if you’re dealing with several thousands in debt, the Avalanche and Snowball methods may benefit you—as long as you have enough income to make a dent in your debt.
Learn more about the different ways you can pay off debt on your own.
2. Consolidate your debt with a loan
Rolling all of your debt into a consolidation loan could enable you to pay off your outstanding debt, save on interest, and simplify your payment schedule. You’ll still have debt, but it will be at a lower interest rate and with a specific end date, which could help you budget more effectively. However, in order to get a favorable rate, you need a good credit score.
Debt consolidation is great if you’re dealing with $5,000 or more in debt and you’re approved for a loan. But if you can’t qualify, you may want to seek professional help with your debt.
Not sure if a debt consolidation loan is right for you? Find out when it’s a good idea to get a debt consolidation loan.
3. Enroll in a debt management program
A debt management program could be a good option for you if your high interest rates are stopping you from paying off your debt. Debt management programs are offered through credit counseling agencies. The purpose of these programs are to help you get out of debt at a lower interest rate.
When you enroll in a debt management program, the credit counseling agency you work with will set you up with an account that you deposit money into each month. Then, the agency uses the money you save into this fund to pay your creditors on your behalf at a lower, pre-negotiated rate. To help you manage your money better, credit counselors could also work with you to develop a personal financial plan and budget based on your current situation.
Not sure whether credit counseling is right for you? Learn more about credit counseling.
4. Settle your debt for less
If you’re strapped with $7,500 or more in debt, debt settlement could help you get out of debt faster and for less.
With debt settlement, you or a company you hire negotiates with your creditors to accept a reduced payment on your debt and forgive the rest. This could end up saving you hundreds or even thousands on your debt. However, debt settlement often lowers your credit score, so if you’re intent on keeping your score high, this may not be the solution for you.
Settling on your own can be a difficult and time-consuming process, but Freedom Debt Relief is here to help. We’re the largest debt settlement provider in the country, and since 2002 we’ve helped resolve over $10 billion in debt. If you think debt settlement might be right for you, you can learn more about our debt settlement program.
You’re already taking your first step to debt freedom just by educating yourself on your debt relief options. Keep it up and you’ll be on your way to tackling your debt in 2019. Need more info before you decide on which solution is right for you? Download our free debt management guide.