As with many situations involving finances, in order to succeed with getting rid of your debts as soon as possible you need to develop a plan. A solid plan could include any of the below tips that are designed to get you the freedom you desire, depending on your situation. Here are my tactics for pay off those debts.
#1: Put on as much as you can over the monthly minimum as possible.
It may feel tempting to only put the minimum monthly amount down until you can pay off the whole debt entirely. But you’d be doing yourself a favour by putting down as much as possible each month–then you can experience debt freedom as soon as possible.
#2: Using the snowball method
With this method, if you have more than one credit source you would pay off the source that has the smallest amount of debt on it. You should definitely continue to pay the minimum monthly payment on time for all other sources, so you do not end up going into default, but hold on off on putting anything further on that other debt until you’ve paid off the smallest. This can give you a sense of satisfaction as you see each source of credit become clear of debt over time.
When might this not be the best tactic for you to use? Well, if your credit source with the lowest amount of debt doesn’t have the highest interest rate, your debt may continue to grow quickly. The credit source with the highest interest rate could prevent you from seeing your debt amount dwindling too quickly if you use the snowball effect, even if the amount you currently owe on it isn’t that big.
#3: Debt stacking
Another method is to put the most significant amount at first onto the source that has the highest interest rate. The longer you let your debt that is collecting the most interest sit there, the more steeply your debt will grow–this is a good way to counter that.
This technique has its own downside: You may feel like you’re not getting anywhere, depending on the size of the debt here, as the sources with the highest interest rates could take longer to pay off. This technique can help in the long run, though.
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