MEMPHIS, TN (WMC) - Chances are if you are reading this right now, you or someone you know has credit card debt. It's a growing problem, and sometimes getting it under control can be a problem of its own. However, consumer experts say there are a few ways you can pay down your debt starting today.
The experts at Bankrate.com say the first thing you should do is pay off the most expensive balance first. They say this will help bring down your high interest debt. The trick here is to pay that off first, and then pay the minimum on everything else. They say throw everything you can at the biggest balances, because they will have the most interest.
However, there is an opposite, but very similar, approach. It's called the "snowball" method, and it was developed by radio host Dave Ramsey. He says the best way to pay off debt is to get some confidence that you can do it. Start off by paying the little ones off first. That way you can keep the momentum going, sort of like a snowball.
Another way that is catching on is to do a balance transfer. The consumer experts say if you have good credit, then you could qualify for a card with lower interest rates that could help you pay down faster.
Another method, of course, is to control your spending. Matt Kelly and his wife paid of $165,000 in debt from credit cards, student loans, and a mortgage in just 15 months. He says you should budge for the following things:
- Basic necessities: Rent/mortgage, utilities, groceries and gasoline.
- Obligations: Minimum payments on credit cards and other debt.
- Nice-to-haves: Restaurants, coffee and entertainment costs.
- Irregular recurring expenses: Insurance, car repairs, tires, haircuts, vitamins, toiletries, vet bills, holiday gifts, travel, weddings and gift
Experts also suggest growing your emergency fund--something 28 percent of Americans said they do not have. Having an emergency fund will help you refrain from falling back into credit card debt.
Lastly, a switch to cash could help with your debt. Paying with cash can help you spend less because of the psychological pain of handing over your money.
Click here to read more about how to clear out your debt.