Have you ever gone on a shopping spree with your credit card doing all the purchasing for you? It must have been euphoric, buying things without having to worry about the money in your pocket. But have you stopped to consider the consequences of this thoughtless spending? Did you ever think about the debt you've continuously collected as the number of bags you're holding kept increasing in number?

A lousy spending habit is usually the reason why people have large numbers of accumulated debt under their name. Lacking financial literacy to curb your consumerism is a surefire way to find yourself stuck in a never-ending cycle of debt. Not only are you going to pay what you owe, but lenders will also ask for interests, making you pay more money than you borrowed. 

This is why being financially aware is essential. A lot of online lenders aim to help people achieve financial stability as well as literacy, take Creditninja as an example. They provide information about ways to spend money responsibly, especially money associated with loans. With helpful articles paired with discipline, spending less, and being debt-free would be easier than ever.

Why do people get into credit card debt?

Spending more than what you earn, as mentioned before, is just one of the reasons why credit card holders are deep into the pool of debt. It is the most common, too. According to the joint research conducted by the AARP and the Association of Young Americans (AYA), more than half of Americans spend beyond their means. 

50% of Americans have credit card debt, while 40% have either car loans or mortgages to pay off. 30%, on the other hand, have student loans. Almost half haven't earned anything for retirement. 70% of the responders consider that the level of the debt they're in is a problem and should be worried about it. 

Some people use credit cards to pay for financial emergencies. Others only pay the minimum requirement every month. Some also hold too many credit cards or fall for the trick that is card-rewards. Many factors easily affect credit card spending. 

How to pay your credit card debt.

The following are efficient ways to pay your credit card debts.

Prioritize which debt to pay off first.

If you have more than one credit card, pay at least the monthly minimum of each card. After that, focus on paying off the balance with one card at a time. Prioritize your payments in order of importance.

You can choose to pay off the card with the smallest balance. Work your way up until you reach the highest one. Or you could check the interest rates of each credit card and find the one with the highest rate. When you've seen it, focus on paying off that debt first.

Pay using balance transfers.

Transferring your credit card balance to a different card is what a balance transfer is. This is an option if you want to move your debt to a credit card with fewer penalties, lower interest rates, and excellent benefits. Many companies offer balance transfers for free. But since the practice had become less frequent, another offer is an introductory period lasting for 6 to 18 months where there is no interest charged on the debt you've transferred. 

There's a catch, however. When you transfer the balance, there will be a monthly balance that comes with it. This loses your credit card's grace period and might charge interest on purchases. 

Apply for a personal loan.

Personal loans are loans borrowed from banks or lenders. This type of loan is paid back in fixed monthly payments, with a timeframe of 2-5 years. Depending on the lenders, APR rates can range from 6% to 36%.

The money acquired from applying to personal loans can be used to pay your credit card debt. Personal loans have lower interest rates than credit cards, though how low depends on how excellent your credit score and report is. 

Paying more than the minimum requirement.

If you only have one credit card, you can pay much more than the minimum to pay it off faster. Paying in minimum only pays the interest charges. That's only a small amount. It can take years to pay off credit card balances if you only settle for the minimum. 

The goal is to pay your debt faster. If you have the extra income you can spare, you should add it to the amount you are going to pay. There is nothing wrong about paying the minimum since it helps you avoid fees in credit cards, but it would be better if you pay more.  

Go for debt settlement.

Debt settlement are services that are usually offered by third-party companies to help reduce your debt. Some creditors can also settle with you in a negotiation. This is an option that works if you have plans to get rid of your credit cards. Debt settlement is beneficial to people who can pay in one large sum to creditors, or people past-due on their monthly credit card expense. When settled, there is a possibility you can pay 50% less of your previous balance.

However, before you take the risk, some companies can leave you deeper in debt despite managing to lessen your credit card balances. This option can also take a toll on your credit card scores. Be careful, and don't get yourself involved with debt relief scams. 

Takeaway

Credit cards make spending easier, but it comes with a hefty price, both literally and figuratively. Paying them off, especially debt with larger amounts, won't be an easy task. But there are options you can choose to alleviate the burden that comes with paying your debt off. Just look for what option fits you most and stick to it.