Accelerate Debt Repayment – Pay More Than The Minimum

Increase your monthly credit card payments to pay them off faster.

Find the True PricesSave Money As You Pay Down Debt

Find the True Prices

The “Amount Owed” number you stare at on your credit card bill can look intimidating compared to the smaller, more manageable “Minimum Payment” number.

Credit cards tempt you to purchase items outside of your price range, like buying that iPad right away instead of waiting till you’ve saved up the cash. This means you’re paying much more than the ticket price.

The Truth About Minimum Payments

Unlike the moral of The Tortoise and The Hare, slow and steady does not win the race when it comes to paying off your credit card.

Payoff Tip

Larger monthly payments can improve your credit score.

Making more than the minimum payments also decreases your debt-to-income ratio (DTI), which compares your total debt relative to your income. Your credit score will increase as your DTI decreases, improving your chances of getting a new loan.

To really impact your debt reduction, you’ll need to be a more than the minimum payment type of person.

Say you have a credit card with a balance of $4,500 and minimum payments of $90 (2% of your total owed). With an APR of 20%, about $75 of that $90 minimum payment goes to covering your monthly interest. Leaving a measly $15 going toward your balance.

Save Money As You Pay Down Debt: The Stacking Method

By making more than the minimum payments, you’ll start paying your credit cards off much faster.

We suggest you focus on paying off your credit card with the highest interest rate first.

The Stacking Method

  1. Determine how much money you can commit each month to pay off your credit cards.
  2. List all of your credit cards from the highest interest rate to the lowest.
  3. Put all your extra money towards the monthly payments of your card with the highest interest rate.
  4. Keep paying the minimum on the rest of your credit cards.
  5. Once you’ve paid off Card 1, add those monthly payments to your card with the next highest interest rate (Card 2).
  6. Continue until you’ve paid off the rest of your credit cards (Card 3, Card 4, etc.).

Why use this strategy?

You’ll pay the least amount of interest, while paying off your credit cards faster. But bottom line, it saves you the most money.

Save Money As You Pay Down Debt: The Snowball Method

We get how easy it can be to lose motivation, and getting that motivation back can be hard.

Seeing a credit card balance reach zero can be a big milestone in your debt repayment journey. So if you’re looking for a way to stay motivated as you pay off your credit cards, we suggest paying off the card with the smallest balance first.

The Snowball Method

  1. Determine how much money you can commit each month to pay off your credit cards.
  2. List all of your credit cards from the smallest balance to the largest.
  3. Put all your extra money towards the monthly payments of the card with the smallest balance.
  4. Keep paying the minimum on the rest of your credit cards.
  5. Once you’ve paid off Card 1, add those monthly payments to your card with the next smallest balance (Card 2).
  6. Continue until you’ve paid off the rest of your credit cards (Card 3, Card 4, etc.).

Why use this strategy?

It can be very motivating to see an immediate impact, and you can get rid of your credit cards with annual fees first.

 Accelerate the Debt Repayment

Stop Adding DebtPay More Than the Minumum

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