Consolidating Credit Card Debt
Credit card debt can be very worrisome. The average American household has roughly $16,425 in credit card debt. If you are one of these people and wish to consolidate your debt in 2018, here are a few ways that can help.
Consolidate Debt to a Single Card
The average American has 2.6 credit cards. One way to consolidate credit card debt is to use a balance transfer card. A balance credit card is meant to help reduce the interest a person is paying each month. Instead of paying several monthly payments, moving your balances to one card means you only have to pay one monthly installment.
Most transfer credit cards offer an introductory annual percentage rate (APR) of 0%, typically for a period of up to 21 months. This 0% APR lets you focus on paying your balance without having any additional interest added on. Make sure to have a plan in place once the introductory period is over.
Debt Avalanche Method
The debt avalanche method is one of the best ways to minimize the amount you’re paying each month in interest. This method is done by focusing on the credit card that has the highest APR first. List out all your credit cards on a sheet of paper, starting with the highest APR and working your way down to the lowest. Each month, pay the amount budgeted for the card with the highest APR. Once that card is paid off, move onto the next card on the list.
Debt Snowball Method
Instead of focusing on the card with the highest APR, the debt snowball method focuses on the lowest balance first. For this, list your cards with the lowest balance first and work your way up to the highest balance. This method provides motivation to keep going. It allows you to see the progress you’re making faster.
Only buy what you can afford
This may seem like an obvious one. However, many people end up with credit card debt because they purchase things they can’t afford in the moment. Before buying something, ask yourself if it’s something that you can afford right at that moment. Do you have enough money in your bank account to cover the charge? If not, you may want to rethink your purchase.