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Any tips and tricks to paying off cc debt fast?

Long story short, I have racked up about $17k in credit card debt and I am sick and tired of having this debt hanging over my head and I want to get this thing paid off as fast as possible.

I have decently gotten serious about paying this thing down and I wanted to know what the tips and tricks were to pay this thing off asap. That is, if there are any.

The good thing about my situation is that I make a lot of money and am at no risk in defaulting on any of these debts. In fact I can overpay considerably on these credit cards.

I have balance transferred some debt around and have the following:

~11k @ 17.99% (ouch, I know)
~4.5k @ 11.99%
~2.2k @ 11.39%

I know I should put most of my money to repaying the high interest rate card but psychologically I want to pay off the 2.2k card asap so I only have 2 cards to pay on.

The only thing I can think of is to try to apply to a bunch of 0% cards and do balance transfers whenever the opportunity comes up. Is there anything else I should be aware of? Anything I can do to pay it down faster and/or not have so much interest paid?

Comments

  • Tixy
    Tixy Posts: 31,455 Forumite
    Probably an obvious tip but one people sometimes forget. If you can, pay your card as soon as you can in the month after you get paid rather than wait for the date of the DD, This can be 2weeks later and can, over time, make quite a difference to the amount of interest you pay.

    Have a look as the snowball calculator to see what a difference it will make to pay of the smaller card or the high apr card. http://www.whatsthecost.com/snowball.aspx

    You might want to look at whether the provider of the 2.2k card is one that regularly does new 0% deals once the card is paid off. If they did then you could cost out paying off that card first then transferring as much as you can of the 11k card on to a 0% deal - to see if its likely to be possible have a look here - https://forums.moneysavingexpert.com/discussion/33 (but obvioulsy don't count on getting a deal as offers change all the time).

    Also remember you cannot transfer from one card to another issued by the same provider.

    Finally - might be worth a quick call to see if the 17.99% card might reduce the APR (even 1 or 2 % would help).

    If any of your providers try to increase your APr then remember you can opt out of the increase.

    As to applying for new cards, certainly worth a try, although I wouldn't go for a bunch of applications, just one or 2.
    A smile enriches those who receive without making poorer those who give
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  • Hi Tixy thanks for your reply.

    As far as paying them down in the middle of the point, good point I didn't even think about that. I'll start paying as soon as I get paid for now on. However I don't know how this works, does the CC company have the option to hold the payment and only apply it at the end of the month? Or are they legally required to apply it right away?

    As far as new cards, yesterday I applied online and got approved for a 1.6k 0% for 18 months card. I plan on transferring 1.6k of the 11k debt onto that card and pay it off in 4 months. I wonder if I can keep transferring 1.6k into the card or if its only one time (at 0% I mean), I will have to look into that. If not, I will try and apply for another 0% interest card in 4 months.

    Any other tips?
  • Sibley
    Sibley Posts: 1,557 Forumite
    Ninth Anniversary Combo Breaker
    I think you should just get a bank loan then cut the cards up. That way you know in say 3 years the debt is gone for sure.
    We love Sarah O Grady
  • Sibley wrote: »
    I think you should just get a bank loan then cut the cards up. That way you know in say 3 years the debt is gone for sure.

    Not sure I can get a bank loan for that much considering I already have the outstanding debt and the fact that I also have a mortgage (bank loan).
  • td_007
    td_007 Posts: 1,212 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Hi Tixy thanks for your reply.

    As far as paying them down in the middle of the point, good point I didn't even think about that. I'll start paying as soon as I get paid for now on. However I don't know how this works, does the CC company have the option to hold the payment and only apply it at the end of the month? Or are they legally required to apply it right away?

    Your interest is calculated on a daily basis so any payment you make is applied immediately and will reduce the interest. So pay in as soon as you can and as much as you can. If you find that you have a tenner to pay, then pay that in. Beware though some CC will reduce the minimum amount they take (by direct debit) if you make additional payments. For eg if your next min payment is £50 and you make £25 payment today, they will take only £25 on the payment date. So be on top this and pay the additional amount to cut balance
    As far as new cards, yesterday I applied online and got approved for a 1.6k 0% for 18 months card. I plan on transferring 1.6k of the 11k debt onto that card and pay it off in 4 months. I wonder if I can keep transferring 1.6k into the card or if its only one time (at 0% I mean), I will have to look into that. If not, I will try and apply for another 0% interest card in 4 months.

    Any other tips?

    You need to see what is the BT fee (usually 3-4%) so you will pay approx £45-£60 as fees. Also, you need to make the transfer usually between 2-3 months of account opening for 0% rate - so idea of repeated transferring will not work.
  • Could you try to consolidate onto a single lower interest card, some of which feature a zero balance transfer fee? That way it becomes more like a loan in terms of interest, you don't get a massive blob of interest applied on the balance transfer, it's all in one place and you won't need to shift the debt to another card to get a 0% offer.

    Your balances may be a bit high for a single company to accept them all though, and you should do the sums to see how much interest you'd be charged for going down the 0% route with 2-3% fee, or by going to another card with say 6.9% for life and no fee.

    Maybe you could just move the 17.99% debt onto such a card.

    Also, I didn't know that about the payment date reducing the amount of interest, but it makes sense. Noted!
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