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This is a great time to get out of credit card debt.

In the wake of the COVID-19 pandemic, as the economy begins to return to normal, the average American personal savings rate has risen to record levels.

Still, many are stuck with high-yield credit card debt — a burden that will only get worse if the Fed raises rates as early as next year.

In other words, it’s time to start reducing your debt — especially if you’re able to save money during the pandemic.

Here are six clever strategies to help you.

1. Additional monthly payment

You’re probably used to a monthly billing cycle, but you don’t have to wait until the due date to pay off some of your balance, and you’re not limited to paying only once a month.

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Credit card interest is compounded daily, and applicable financing charges are based on your account’s average daily balance. That means you’ll have to pay more interest charges each day you wait for payment.

If you pay bi-weekly or bi-monthly, maybe twice a month. If you get paid more frequently — like you get a weekly salary or you’re a tipped worker — consider starting your debt management plan with weekly payments.

Another benefit of paying more than once a month is that if you use the money to pay off your credit card balance after earning it, you don’t have the chance to change your mind and do something else with the money later on.

Just make sure that the total amount you pay by the due date on your credit card statement is at least your minimum payment, because late fees and penalties will still apply if you don’t.

Here’s another hot tip: Reducing debt quickly can also improve your credit score by reducing credit utilization, which can make it easier to qualify for a balance transfer credit card (read on to learn more).

2. Get a credit card balance transfer

If you have good credit, you may qualify for a card that will allow you to pay off your outstanding balance faster.

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Funds transfer credit cards offer an introductory rate of 0% during the promotion period – this varies, but 12 to 18 months is the norm. This introductory phase gives you the opportunity to pay off your debt quickly: since you pay no interest, your entire monthly payment goes directly toward capital repayment. However, prioritise cashing out your balance before the promotional period ends – especially if the non-introductory APR is high.

One caveat: Balance transfer credit cards also offer 0% APR on purchases which may seem like a nice perk, but it’s important to focus on your top priority (paying off credit card debt).

Also note that many balance transfer cards charge a balance transfer fee of at least 3% – this fee may increase if you have a lot of debt. Look for cards with low or no balance transfer fees, so more of your funds can be used to pay down debt. (For more, see: The Best 0% APR Credit Cards Available Right Now.)

3. Create a “debt avalanche” or “debt snowball” repayment plan

There are two main ideas when it comes to paying off credit card debt.

The first is the “debt avalanche” method, which focuses on paying off the card with the highest interest rate first and then, once paid off, switching to the card with the lowest interest rate. This method makes the most mathematical sense because you reduce the time it takes to pay off the credit card that charges you the most.

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Another strategy is the “debt snowballing” approach. It’s designed for those struggling to stick to their debt-reduction plans when there seems to be no end.

The “debt snowball,” popularized by personal finance expert Dave Ramsey, focuses on paying off your smallest debt first, followed by your next smallest balance, and so on. According to some behavioral economists, getting out of small debt early in the repayment process can be a valuable mental reward that can help some people stay motivated to stick with it.

It’s not as cost-effective as paying off high-interest debt first, but if it gives you the motivation to pick yourself up and pay it down, it may be the preferred route.

4. Take out personal loan

If you don’t have good credit, applying for a personal loan and paying off your credit card debt in full may be your best option. You can search for lenders online or check with your local bank or credit union for personal loans (they may also be called debt consolidation loans). You’ll still pay interest, but the rate may be lower because the APR for a personal loan is usually a few percentage points lower than the APR for a credit card. Instead of tracking multiple credit card accounts and due dates, you only pay one debt each month.

5. Cut spending by tightening the budget.

No one likes to hear this, but one of the easiest ways to pay off debt fast is to spend more money each month. That means finding new ways to save, like every time you pay more than the minimum amount on your credit card bill, you’re one step closer to being debt-free.

6. Contact a credit counseling center for professional help.

If you’ve tried the strategies on this list and are still struggling to get your credit card debt under control, maybe it’s time to call in a professional. A nonprofit credit counseling service will review your credit card debt against your other financial commitments (such as a home equity loan or line of credit, car payments, or student loans) and work with you to develop a repayment plan. Some even negotiate with credit card companies to lower interest rates and offer financial literacy training to prevent you from falling into debt again in the future.

If your financial situation is particularly difficult and you are contemplating bankruptcy, credit counseling is already necessary before you pull the trigger. Taking this step alone may lead you to realize that you can solve your debt problems with a repayment plan rather than bankruptcy.

Bottom Line: How to Pay Off Credit Card Debt

With the job market improving, wages rising, and many people having more emergency funds in their bank accounts, now might be a good opportunity to pay off all of your debt — or at least start paying off your balance.

It may not be quick or easy, but many people who stick with a debt management plan say that once they’re free of debt, that sense of relief is worth it.

If you have a lot of credit card debt, now is no time to start working to get rid of it.

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