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5 Ways to Pay Off Credit Card Debt

By | Debt

Pay Off Credit Card Debt

Paying down credit card debt is one of the best methods for repairing credit and improving your credit score. Here are easy and painless ways you can pay off your credit card debt:

1. Pay More Than the Minimum

With most minimum payments, it can take years to pay off credit card debt. Paying the minimum will not only hurt your credit score, but it will cost you a ton of money in interest. If you can afford it, you should pay more than the minimum.

If you can’t afford to pay more than the minimum, keep in mind that as you pay the principal down, your minimum payment will go down as well. However, you should keep paying the same amount you were paying before in order to pay down your debt faster. Eventually, you will be able to pay more than the minimum and repair your credit.

2. Find Extra Money

If you can’t afford to pay more than the minimum payments, try and find extra money. You don’t have to get a second job to pay down debt. For example, if your minimum payment is $40, be conscious of the fact that only $40 more per month will double your payment. You may have extra money in your budget or you may be able to earn cash. Here are some tips:

  • Fill out surveys
  • Use apps like Ibotta to get cash back from shopping
  • Use coupons
  • Try a no-spend challenge
  • Reduce your spending by just $10 per week

3. Use the Snowball Method

For multiple credit cards, the best and simplest way to pay them off is to use the snowball method. With this strategy, you pay off the card with the lowest balance first. Then, you put the money you were using for that card toward the card with the next lowest balance, and so on. Here’s a step-by-step example:

  1. You have three cards. One has a balance of $300, the 2nd a balance of $1,000, and the 3rd has a balance of $1,500. You’re paying the minimum payments on all three, but you have an extra $50 you can use toward the debt.
  2. Take the extra $50 per month and apply it toward the 1st card; then, pay minimums on the others until they are paid off.
  3. Take the extra $50, the 1st card’s minimum and the 2nd card’s minimum, and apply to the 2nd card until it’s paid off. Continue paying the minimum on the 3rd card.
  4. Apply the $50, the 1st, 2nd and 3rd card’s minimum to the 3rd card until it’s paid off.

You will be debt-free relatively quickly without having to put a lot of money toward your credit cards.

4. Make the Most of Unexpected Cash

The fastest way to repair credit and pay off debt is to pretend extra money doesn’t exist. If you get a raise, bonus, overtime payment or cash gift at work, apply it toward your credit cards. You should budget as if overtime or bonuses don’t exist. That way, when you get the money you can use it to pay off debt or build savings.

5. Pay Twice

Some credit cards calculate interest based on average daily balance. If your credit card is one of them, remember that the easiest way to pay off the balance is to pay twice per month. Before you panic, you don’t need to pay twice the minimum payment each month. Instead, take your payment and divide by half. Pay that amount every two weeks. This will reduce your average daily balance, which will reduce your interest so you can pay off debt faster.

You can repair your credit score and pay off debt by following these strategies. Credit card debt may seem daunting, but you can unbury yourself and improve your credit.
 

Sources:

https://www.thesimpledollar.com/the-debt-snowball-concept-how-i-made-it-work-for-me/

https://www.nerdwallet.com/blog/credit-cards/minimum-payment-credit-card/

http://www.investopedia.com/terms/a/averagedailybalance.asp

Personal Finances – Mobile Evolution Improving Success

By | Personal Finance

Since the dawn of the Internet – and followed by the launch of smartphones – everything has changed. Being able to communicate in ways that we never imagined, it became possible to instantly have a face-to-face conversation with someone halfway across the world, map directions and even manage your bank account on your mobile phone.

This evolution is improving the ability to track budgets, manage personal finances and build credit more securely than ever before.

Personal Finances Mobile Apps

 

The Relationship Between Mobile Phones and Money Management

The online world and the rise of mobile phones dramatically changed the way we communicate with one another, share critical information and even how we manage our day-to-day lives. This is particularly true in relation to money management.

When it comes to personal finances, in a matter of seconds, you can check balances, transfer money, access your statements, budget and even work towards a healthier credit score — all through the use of your mobile phone. Whether you want to pay a utility bill while you’re at the coffee shop or transfer a portion of your paycheck into a savings account, so much can now be accomplished through a mobile screen.

When it comes to banking services, for instance, mobile phones changed the efficiency of financial institutions forever. In fact, there are now some banks that are only accessible online — which means that you no longer need to waste 30 minutes of your lunch break to wait in a physical bank queue.

The Rise of Managing Personal Finances on Mobile

As mobile apps continued to develop and evolve, our finances became that much more accessible. In fact, based on a 2015 survey, 53 percent of people with a bank account and smartphone utilize mobile banking. When using banking services, the three most common mobile banking activities include:

•   Checking recent transactions (94 percent)

•   Transferring money between accounts (58 percent)

•   Receiving notifications from their bank (56 percent)

With so many specialized apps, independent of standard bank institution apps, managing funds and even investing has never been easier. Although there are many benefits associated with these apps based on convenience, none are more significant than the level of control you gain over your personal finances.

Mobile apps have allowed you to do much more than bank online. When you have access to various apps, you can do anything from pay your student loan to check your credit card balance. Whether you’re investing or banking, your goals can be achieved in a matter of minutes, helping you improve your long-term financial health.

As these changes continue to occur, companies are developing apps that are more powerful, higher in terms of security and are much more flexible than ever before. In fact, mobile apps can allow you to:

•   Better manage your money

•   Maintain a budget

•   Support debt repayment

•   Track expenses

•   Improve financial behavior so that you can save

Repairing Poor Credit Through Improved Daily Habits

When it comes to paying bills on time, there’s one factor that we’re all aware of — our credit score.

While focusing on credit card debt, for instance, for American households who carry credit card debt, it costs them an average of $1,300 per year in interest. With the average U.S. household carrying approximately $16,425 in credit card debt, mobile apps can help consumers not only make payments on time, but improve their current financial state by altering their spending habits.

As you become more aware of your daily habits, seeking the type of credit repair support you require, you will then be on your way to greater financial freedom. It’s all about setting small goals in order to make minor changes in your day-to-day routine.

Once you focus on making your monthly debt payments, budgeting is the next major step. After all, what’s the point of making a payment, just to drive your debt back up? When you learn to properly budget your personal finances, you can avoid this vicious cycle. This is when mobile apps come into play.

Mobile phones are on us at all hours of the day, so when accessing a budgeting app, you will become more aware on a day-to-day basis. Just like a 100-percent cash budget, which makes you more conscious of your spending, a budgeting app can do the same.

Within one survey, of the 3,600 smartphone users who use their phone to bank, 18 percent do so in order to budget, and of those, 69 percent strongly agree that the budgeting apps support healthier spending habits. Whether you want to create budgets, track your spending or pay bills, mobile apps can help you repair your credit over time.

Increase Your Knowledge to Improve Your Financial Health

As we look ahead, there’s no doubt that your personal finances will continue to evolve. As new software programs and online services are developed, the ability to manage our money will continue to become even more practical and convenient.

Whether you want to save more or repair your credit score, one thing is certain — education is imperative. Understanding your options and taking informed action will always pay off. After all, Benjamin Franklin said it best, “An investment in knowledge, always pays the best interest.”

Sources

https://www.nerdwallet.com/blog/average-credit-card-debt-household/

https://www.pressreader.com/usa/usa-today-international-edition/20150429/281788512610586/TextView

https://www.federalreserve.gov/econresdata/consumers-and-mobile-financial-services-report-201603.pdf

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