Ways to pay off your credit card debt
Paying off credit card debt can be challenging, but it’s not impossible. With a solid plan and some dedication, you can pay off your card debt and reach your financial goals faster. Here are some ways to get started:
1. Pay more than the minimum requirement
When you’re struggling financially, squeezing out any more than the minimum payment amount can be tough. But if you’re only paying the minimum balance, you’ll stay in debt longer. A better option is to cut out unnecessary expenses, like coffee runs and takeout orders, and put that money towards your credit card payment instead. Making these small sacrifices today, can help you reduce your credit card debt tomorrow.
2. Switch to a credit card with a lower interest rate
Interest charges can become a big part of what you’re paying on your credit card each month, especially if your card carries a high interest rate. A high interest rate can make it harder to pay off your debt. If your card has an interest rate of 15% or higher, try transferring your balance to a lower interest card. You might find special promotional offers for cards with low or 0% introductory interest rates. If you can take advantage of one of these, transfer your balance right away and pay as much as you can each month. Reducing the interest cost is a great way to start paying off credit card debt.
3. Spread out your payments with installment plans
Installment plans let you pay off large credit card purchases in monthly payments, usually at a lower interest rate than your credit card interest rate. With CIBC Pace It™,1, an installment plan service, you can budget your spending and pay for eligible large or unplanned purchases at a pace that works for you. CIBC Pace It™ is not available to Quebec residents.
Plus, you can still use benefits on your credit card like insurance coverage or travel rewards. When you convert your purchase into an installment plan, you choose the time frame to pay off the purchase from the available options. Once you firm up the details, your next credit card statement will show the installment payment due for that month, with interest.
Learn more about CIBC Pace It™
4. Consolidate debt with loans or lines of credit
By consolidating your debt, you’re bundling all of your outstanding debts into a single one. Not only will debt consolidation help you better organize your monthly payments, but it may allow you to pay less in interest. Here are a few ways to combine and manage your debt:
- Apply for a debt consolidation loan and just pay the single monthly payment on your new loan
- Open a line of credit and pay off your outstanding loans with it
Compare credit card interest rates from CIBC
The key to avoiding a mountain of credit card debt in the first place is to be smart with your spending. Also choose a credit card with a competitive interest rate in case you need to carry a balance some months — it’s better to pay as little interest as possible. For more information about paying off credit card debt or for answers to your credit card questions, call us at 1-800-465-4653 Opens your phone app..