Carrying a large load of debt can be mentally exhausting as well a costing you money in interest. So getting debt-free during the coming year is a smart move to make. These four steps from Mint promise to get consumers to a zero balance faster than they thought possible.
- Step 1: Have a plan. It’s essential to know how much you owe, how much you can pay each month, and how you can reduce spending. Sit down and figure out what you can afford to pay, where you can reduce your budget, and what your plan is to get out of debt.
- Step 2: Start paying off your credit cards, beginning with the smallest amount first. This will give a sense of accomplishment faster than if you tackle the biggest balance first, making it more likely that you’ll stick with your plan.
- Step 3: Don’t just pay the minimum due. When you pay more than the minimum, you reduce the amount of time it takes to get out of debt, and you’ll pay less in interest during that time. Look at the timetable on your credit card statement—it tells you how long it will take to pay off if you only pay the minimum, versus paying a little more each month.
- Step 4:Put the credit cards away. The experts at Mint advise avoiding cash back and rewards that can lure you into using your credit cards while you are trying to pay them down. They suggest curbing spending as much as possible, and using a cash-based approach to spending until your balance is down to zero.
Apps like Mint help consumers see where their money is going, track spending and stick to a budget. Mint has a goals feature that lets users enter their debt paydown plans and see how much progress they are making. The company says their one million-plus users have paid off over $20 billion in debt using the Mint app over the last three years.
The app links credit cards, debit cards, bank accounts and investment accounts to give users a big-picture view of their finances. It’s available free from the Apple iTunes store and Google Play.
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