Debt is weighing heavy on many Americans, and we know that planning to try and work towards paying down debt can be intimidating. By implementing sustainable and achievable changes in your financial habits, you can start saving on less essential items and use the extra funds towards paying down your debt.
Ready to work towards a brighter financial future? These helpful strategies for approaching paying down high interest debt can help you get started.
1. Micropayments
Micropayments can be a powerful tool for steadily reducing high-interest debt. Instead of sticking to a single monthly payment, break it up into smaller, more frequent payments throughout your billing cycle, especially for any larger purchases you put on your card.
- Automatic Micropayments: You can even set up automatic transfers from your account for every two weeks instead of just once a month. This means you’ll make 26 payments a year instead of just 12, which helps you reduce the amount of interest you pay over time and can help accelerate your debt repayment. Take advantage of our FREE Online Bill Pay to schedule and manage your micropayments.
2. The Blizzard Method
The Blizzard Method combines elements of the Snowball and Avalanche debt repayment methods to create a balanced approach to debt repayment:
- Start with the Snowball Method: Begin by focusing on paying off your smallest debt first. This approach provides quick wins, giving you a psychological boost and helping you stay motivated to continue paying off the rest of your debt.
- Then, Transition to the Avalanche Method: Once you’ve knocked out a few smaller debts, shift your focus to the card or loan with the highest interest rate. This will save you more money in the long run. Continue making at least the minimum payments, or more if you can swing it, on your other cards while you tackle the highest-interest debt.
- Repeat the Process: Once you’ve paid off the card or loan with the highest interest rate, move on to the next highest one and repeat the cycle until all your balances are ideally cleared or paid off.
By adopting these strategies, you can take control of your debt and move towards a brighter future full of financial possibilities filled with savings and opportunities! Looking to discuss your checking account and savings account options? Contact Mechanics Cooperative Bank today for more information on the account that’s right for you!
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