5 Smart Strategies to Eliminate Credit Card Debt in 2016
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Stop using credit cards. Making large debt payments is pointless if you’re still charging. Instead, buy only what you can afford to purchase with cash or a debit card until you have paid off all credit card balances.
Target one card at a time. Throw as much money as you can at one card first – such as the card with the smallest balance or the highest interest rate. By making meaningful progress toward debt reduction, you will receive a boost of confidence that can help you stay motivated as you tackle other balances.
Transfer balances. If you are committed to paying off debt within a limited-time 0% APR promotional window, such as 12 or 15 months, it makes sense to transfer balances to a new card. The lower rate will reduce your minimum monthly payments and the total amount you’ll repay on the debt.
Take out a home equity loan. If you have equity in your home, put it to work by paying off credit card debt. For example, if your home is worth $200,000 and you owe $150,000, you have $50,000 worth of equity you can utilize. Home equity loans come with much lower interest rates, so it may make sense to trade high-interest debt for low-interest debt.
Consider a personal loan. If you qualify, a personal loan with a lower interest rate than your credit cards can also give you a leg up on repayment. Because personal loans have set terms and a set repayment schedule, you will know exactly when you’ll be free of credit card debt.
Be Debt-Free in the New Year
At City Bank, our goal is to help you achieve yours. Call us today at (800) OUR-BANK so we can discuss your needs.