Since January, many Brits have increased their borrowing to battle the rising cost of living. As a result, credit card debt across the UK is on the rise, and an increasing number of borrowers are struggling to keep up with what they owe. If you’re currently feeling the squeeze of credit card debt, here are five ways to pay off your balance quicker.
1. Take out a personal loan
At first, the idea of paying off one loan by taking out another may seem contradictory. However, personal loans often come with much lower interest rates, making them easier to pay off over time.
Therefore, you could decrease the amount you pay back by swapping credit card debt for a personal loan. If the interest of your credit card debt is piling up, this could be an excellent option to consider. You could clear your credit card debt and be left with more manageable loan repayments.
Nevertheless, personal loans still have to be paid back. If you’re not sure you could keep up with personal loan repayments, it might be worth looking at another option.
2. Use your savings
While it is always a good idea to have some savings stashed away, it may be worth sacrificing what you’ve saved to get yourself out of debt. Once your credit card debt has been cleared, you will be able to save more money each month and rebuild your savings.
Easy-access savings accounts and cash ISAs allow you to take from your savings whenever you need to. However, before using your hard-earned savings to pay off your debt, make sure that you won’t need to borrow any more. Using your savings to clear your existing debt is only worth it if you stay away from accumulating more debt in the future.
3. Use a balance transfer
Balance transfers allow you to move existing credit card debt onto a card that will charge 0% interest. This is a great way to reduce the amount of interest that is added to your debt, making it easier for you to pay it off.
Most balance transfer cards offer 0% for a specific number of months. Therefore, you should try to clear the debt within this period to prevent any interest from being added. Our list of top-rated balance transfer credit cards is a great place to start if you’re not sure which card to go for.
4. Keep your debt in one place
The easiest way to keep on top of your debt and clear it quickly is to keep it all in one place. By doing this, you only need to worry about making one payment each month. As well as this, keeping your debt on the same card can make it easier to calculate how much you owe after interest.
Most credit cards allow you to consolidate your debt by moving it to one card. Naturally, it’s best to move your debt onto the card with the lowest interest rate. In fact, if you have more than one card, at least one of them may offer a 0% balance transfer for any debt that you move across.
5. Make the most of bonuses
It can be very tempting to use extra money to treat yourself. However, this extra money could go further if used to pay off your debt.
Most credit card providers will allow you to make larger payments whenever it suits you. Therefore, you should try to take advantage of financial bonuses by paying off as much debt as possible. While this may feel tight, using extra funds to pay off your debt will provide you with more financial freedom in the long run.
A top tip
The quicker you clear your credit card debt, the less you will have to pay back over time. As a result, you should make it a priority to pay back what you owe as quickly as possible. Once your debt is cleared, you will be able to swap monthly credit card payments for treats or increase your savings.
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