5 Simple Steps to Paying Off up to $100,000 in Credit Card Debt
Many of us carry credit card debt.
It’s an unfortunate fact, and it’s becoming more and more commonplace in today’s society.
But getting rid of your debt doesn’t have to be this huge life event. It doesn’t have to take days and days of strategizing, years and years of strict budgeting or even decades and decades of payments.
Trust us: You can — and you will — make it out.
You just have to know where to start.
5 Simple Steps to Get Rid of Up to $100,000 in Credit Card Debt
The key to paying off your debt is to not become overwhelmed. It’s easy to build it up in your head until it’s this huge, mountainous task that’s impossible to scale.
Nope! Don’t let that happen. Instead, take away the stress and follow these simple tips to embark on your debt-payoff journey.
1. Let This Company Pay off Your Credit Cards Upfront
When you think about how much debt you have, you might feel a little anxious.
That’s where a company like Fiona can be helpful. It can help you find personalized lending options to refinance or consolidate your debt to potentially save thousands of dollars in interest.
Fiona will show you all the lenders willing to help you pay off your credit card and eliminate the headache of paying bills by allowing you to make one payment each month.
If your credit score is at least 620, you can borrow up to $100,000 (no collateral needed) and compare interest rates, which start at 3.84%. The idea is to secure a loan at a lower interest rate, potentially helping you save thousands. Repayment plans range from 24 to 84 months.
Take, for example, Katherine, who faced $12,000 in credit card debt. Holding her back? The 15.24% interest rate. By refinancing with a 5%-interest, seven-year personal loan, she saved $12,000 in interest.
If she’d kept on the same road, she would have paid something like $14,000 in interest alone over 25 years. Yikes.
So even if you’re simply curious about what’s out there, know that checking rates on Fiona won’t hurt your credit score — and can probably save you in interest.
2. Start Trimming Your Monthly Bills
If you can cut down your monthly bills, it will leave more money to pay down your debt faster. But we’ve all got inescapable monthly bills. In terms of fixed expenses, your car insurance bill probably ranks right up there with your rent or mortgage payments.
Well, we’ve got some good news and bad news about car insurance: You’re probably overpaying.
But how would you know, really? Have you shopped around lately? Have you compared rates from the 20 largest auto insurers that do business in your area? That sounds kind of difficult and time-consuming, doesn’t it?
Fortunately, a service called Gabi will do it for you, and you don’t even have to fill out any forms. Simply link your insurance account and provide your driver’s license number, and Gabi will go to work.
Once you link your insurance account to Gabi, it will:
- Scan your existing insurance plan.
- Analyze what coverage you have.
- Compare the major insurers’ rates for that same coverage.
- Help you switch on the spot if it finds you a better rate.
Gabi says it finds an average savings of $720 per year for its customers.
It’s a true apples-to-apples comparison at the same coverage levels and deductibles you currently have. Once you sign up, you never have to shop again. Gabi’s software has your policy on file and keeps on monitoring for savings as your life changes.
3. Clean Up Your Credit Cards and Find Some Hidden Cash
Have you ever asked yourself: “Where the heck does all my money go? How is my credit card bill that high again this month?”
It’s time to take a few minutes to clean up your tab. You can negotiate your bills, cut unnecessary subscriptions and wipe out bank fees with a service called TrueBill.
Yup. Download TrueBill, and it’ll negotiate your bills, cancel unwanted subscriptions and refund your bank fees for you. On average, TrueBill says it helps customers save more than $700 a year.
You can also try digging up some extra cash with Paribus — a tool that gets you money back for your online purchases. It’s free to sign up, and once you do, it will scan your email for any receipts. If it discovers you’ve purchased something from one of its monitored retailers, it will track the item’s price and help you get a refund when there’s a price drop.
Another way to save money? Shop through Ebates, a cash-back site that rewards you nearly every time you buy something online. For example, Ebates gives you 10% cash back on online purchases at Walmart. Plus, you’ll get a free $10 gift card to Walmart for giving the site a try.
Disclosure: Paribus compensates us when you sign up using the links we provide.
4. Earn Rewards When You Pay Off Your Debt on Time
When you were a kid, your mom probably gave you an allowance for washing the dishes and sweeping the floor. Now all you get for doing that is a kitchen that’s clean for, like, 15 minutes.
Now that you’re a grown-up, you no longer get rewarded for just doing the things that are expected of you — like, for instance, making payments toward your debt on time.
Not until now, anyway. MoneyLion, a free app for managing your personal finances, will reward you for things like paying your bills and monitoring your credit — even just setting up an account in the app.
Much like that childhood allowance, it’s basically bribing you to be good.
You’ll earn points in the app’s rewards program, and you can redeem them for gift cards to more than 15,000 retailers, including places like Walmart, Applebee’s and Amazon.
If you want to take it a step further and work on paying down debts, for example, MoneyLion can help with a loan to consolidate your debt and potentially reduce your interest rates. And it’ll reward you for that, too!
5. Start Saving Without Even Trying
Although you’re taking strides to pay off a chunk of debt, you can’t forget about your emergency savings. If something were to happen, you could land in another pile of debt — and the cycle would sadly continue.
But here’s a simple way to save money while paying off debt: Use Digit, an innovative app that automates saving for you. Simply link it to your checking account, and its algorithms will determine small (and safe!) amounts of money to withdraw into a separate, FDIC-insured savings account.
Bonus: Penny Hoarders will get an extra $5 just for signing up. Additionally, savers will receive a 1% bonus every three months.
Using this set-it-and-forget-it strategy, one Penny Hoarder saved $4,300 without noticing — read his Digit review.
If you need that money sooner than expected, you’ll always have access to it within one business day.
Digit is free to use for the first 30 days, then it’s $2.99 per month afterward.
Carson Kohler (@CarsonKohler) is a staff writer at The Penny Hoarder. She’s a very anxious person, so she totally understands how big financial to-do tasks can quickly become overwhelming.