How to Pay Off Credit Card Debt

Other financial planners suggest paying off the one with the smallest balance, which can give you a sense of accomplishment and encourage you to keep going.

You can also consider consolidating credit card debt, perhaps with a lower-rate personal loan, to make payments more manageable, Ms. McAvoy said. Having just one bill to pay may be less stressful, she said.

If you can find a card with a zero-interest offer, transferring your balances and paying the new card off over time may be an option. But banks are making fewer zero-interest transfer offers of late, and those that are available tend to have shorter payoff terms and carry higher transfer fees, Mr. Rossman said.

Can I use a home equity line of credit to pay off my card debt?

Many homeowners with mortgages saw their home equity — the difference between a home’s value and the amount owed — increase over the past year. If you qualify, a line of credit secured by your home will generally offer a much lower interest rate than the one you’re paying on a credit card. But keep in mind that the home equity loan is secured by your house, so if you can’t pay, you could lose your home.

“It’s still debt, so you want to be careful,” Ms. McAvoy said.

Can I ask my card issuer to lower my interest rate?

Yes. Even before the pandemic, banks from time to time offered to reduce interest rates temporarily, usually for customers with good credit. But even if you aren’t targeted with an offer, you can request a reduction.

“It’s always worth asking the issuer if they’ll lower your interest rate,” Mr. Schulz said.

During the pandemic, some banks have offered to lower monthly payments or waive interest charges for people who are having financial difficulties.

Article source: https://www.nytimes.com/2021/01/15/your-money/pay-off-credit-card-debt.html