One of the biggest issues while using a credit card is that it can easily land you in a debt trap. With an easy-to-pay and easy-to-accumulate system, credit card debt can easily go over your affordable limit and before you know it might even touch a whopping amount of $10,000. You have to identify the reasons and causes behind the excessive credit card debt and take some precautions with your credit card to avoid spending more. Here are a few tips to help you can pay off credit card debt worth $10,000 in the fastest way possible.
Understand the difference between debt avalanche and debt snowball
When it comes to paying off your debt, the two terms that you should know of are debt avalanche and debt snowball. Both are different ways of paying off bills and give you different choices depending on your convenience. A debt avalanche is basically when you start paying off the high-interest rates on your loans and then slowly slide down to lower interest rates. A debt snowball is when you start by paying off lower interest rates and then move on to pay back loans with higher interest rates. A debt avalanche is for people who want to pay off their debts quickly. A debt snowball is suitable for people who have very high-interest rates and cannot afford to pay back large loans in the beginning.
The following are some of the options you can opt for to pay off your credit card debt worth $10,000 in the fastest way possible.
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Opt for a balance transfer credit card
If you got into a credit card debt due to a financial emergency, then you may opt for a new credit card which will let you transfer the balance from your existing card to the new card with a lower interest rate. While your own bank might not offer you lower interest rates, a competing bank may offer your balance transfer credit cards with lower interest rates. There are a lot of options for balance transfer cards in the market. Depending on interest rates and introductory offers, you can pick the one that is suitable for you.
Try procuring a personal loan to avoid high-interest rate
Although getting a personal loan to pay back your credit card debt may seem like a bad alternative, the loan can turn out to be an advantage for you. This is because you will be able to get a pre-qualified loan without any changes to your credit score. Ideally, a credit card interest rate will be about 17-18% while a personal loan interest rate can be much lower. However, to apply for such loans, your credit score needs to be good enough to qualify. A personal loan does not come with any collateral and hence is quite a suitable option for you to clear off your debt.
These two are your best options to get away from a credit card debt of 10,000 USD in the fastest way possible.
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