The unfortunate truth is that you’re fighting an uphill battle if you’re only paying the minimum balance on your monthly credit card bill. Paying the minimum balance can add years to your payoff as interest builds, and may negatively impact your credit score. Putting the “extra” money from cutting back on expenses to pay more toward your debts is beneficial in the long run, and can help you achieve your goals faster.
3. Prioritize your debts
The average household with credit card debt pays $904 annually just in interest, according to NerdWallet. The longer you carry a balance, the more interest you’ll pay out of pocket—on top of what you already owe. There are two tactics to consider: You can tackle higher-interest-rate cards first to reduce the amount you’ll pay overall, or you can tackle smaller balances first so you can free up cash to put toward the higher-interest cards. Select the strategy that works best for you and prioritize your payments accordingly.
4. Consolidate your debts