Looking for a simple way to pay off credit card debt quicker? The key to getting rid of debt is to commit to fixed, not declining, monthly payments and finding a better interest rate.

Here is an example.

Lets say your credit card has an interest rate of 19.75%. If you were to attempt to pay off a debt of $30,000 with fixed payments of $600 per month, that debt would be paid off in just under 9 years. Your total interest cost would be approximately $34,356.

Take out a loan with an interest rate of say 6% and that same debt would be paid off in just under 5 years, almost 4 years sooner than the same debt you’ve accumulated with the credit card. Best of all your interest cost will be reduced from $34,365 to $4,634, that’s almost a $30,000 savings.

In the real world, of course, your debt may not reside on one, but multiple credit cards. The practice of transferring all of your debt to a single loan is called debt consolidation.

Here’s how it works:

1. Add up all your credit card debt.

2. Take out a single loan for the total amount.

3. Use the proceeds of the loan to pay off all your credit cards in full.

4. Pay off the loan in single monthly payments, the interest rate will be considerably less than what you would pay on a typical credit card.

The key here is to pay off debts, if you just get new cards or rack up the balances again this can very quickly spiral and eat up the equity you have built in your home, so discipline is the key to success.
Contact FamilyLending.ca for more information.