When it comes to repaying credit card debt, it can sometimes feel like you’re just spinning your wheels and not making any progress. You make your payments, you pay the interest, but you’re barely making a dent in your total outstanding balance. This is what it’s like to make the minimum monthly payment. The best way to break this cycle and get out of debt faster is to pay more than the minimum.
Get Out of Debt by Paying More than the Minimum
Most of a minimum monthly payment goes towards interest. That’s essentially money that you’re paying to the creditors, and very little of your payment goes toward paying down your balance. You will not get out of debt fast by making minimum monthly payments. A great way to get out of debt faster is to apply more money to your outstanding balance, and pay more than the minimum each month.
To illustrate, check out ACCC’s Debt Payoff Calculator.
Simply enter your payment details, and the calculator will show you how much interest you’ll pay, and how long it will take to pay off the debt. You can also enter how much extra you will add each month to see the difference it will make. You’ll find that paying more than the minimum will reduce the time and cost of repaying your credit card debt.
Try to make adjustments to your budget and cut back spending on unnecessary items. Apply as much as you can towards repaying your credit card debt and you’ll be able to get out of debt faster, improve your credit score, and learn to make good spending decisions for the future.
Need more help with budgeting and debt management? Contact American Consumer Credit Counseling to speak with a certified counselor today for free. Call 800-769-3571.