Credit cards serve as the best solution when it comes to tackling problems like paying for your bills or purchasing something for which you cannot pay at the moment. With the major banks offering a wide variety of credit cards that are readily available in the market, you can buy anything and everything from flight tickets to even groceries. There are plenty of cards available which provide offers on your specific purchases. For example, a different card while you spend on movie tickets, a different card while you pay for groceries, etc. But these offers can be beneficial only if the cards are used wisely. These cards do provide offers on your specific purchases but you have to remember that at the end of the month it is only you who has to pay off the bills that have accrued on your multiple credit cards.
Credit card bills keep adding up on monthly basis and this bill becomes quite high if you are a multiple credit card user. If these bills are not paid on time, they will keep accumulating month over month and start attracting interest charges as well and you can end up being in a vicious trap of debt and which sometimes gets difficult to get out of. This gets out of control and out of budget when you start spending through your credit card unnecessarily. Therefore, it becomes your prime responsibility to keep a check on your credit card usage and also check the credit card statements regularly so that you have a fair idea about how much bill has to be paid on all your credit cards. Now if you have plenty of debts lying in your name by using your multiple credit cards, there exist multiple ways in which you can pay off your credit card bills.
Best strategies to pay off multiple credit cards
There does not exist a single way that is apt for paying the credit card bills for all the users because the method that is right for you may not be right for others. In order to manage all your credit cards without getting your credit score hurt, you should be aware of how you can handle all of them responsibly. Hence, the following are a few ways which can prove beneficial to you in paying off bills owing to multiple credit cards.
Pay for the high interest-bearing credit cards first
When you own multiple credit cards, there is a high possibility that the interest rates on all the cards will differentiate from each other. Now if you have multiple credit cards, you should prioritize paying off the bills of the credit cards that bear the highest interest rates. You can pay the minimum due on the rest of the cards. Once the highest card is completely paid off, then you should start paying off the bills for the next highest interest-bearing card. By following this method, you will be able to pay off the highest interest first. Also, the benefit of this method is that you can save a lot on interest charges.
If you are concerned about the high interest that you will have to pay on your debts, then paying off your bills with this strategy is the best option. But if with high interest, you have a high balance on the card as well, then it would take some while to completely get rid of the balance. Also, it can be quite demoralizing as well as you would not see a sudden but slow and gradual decline in your bills.
Start paying with the lowest balance
Also known as Debt Snowball Method, this is another effective way that can help you in paying off your bills pertaining to multiple credit cards. In this method, you start paying off your credit card bills by paying for the lowest credit card balances first irrespective of the fact that the card bears a high-interest rate or a low-interest rate. You continue to make the minimum payment for the other credit cards so that we do not attract any late payment interest charges towards any other credit card. You should check the balance on all your credit cards and then start to pay for the credit card that has the lowest balance.
Once you completely pay off this card, you should hop to the next credit card with the lowest balance among the remaining credit cards. This method will give you satisfaction as the debts will start decreasing quickly and you will stay motivated as you will see fewer cards with the remaining balance. But this method would not be effective if you are more concerned about interest being charged. If you have high balances on the cards that bear a high-interest rate, then you would end up paying more amount towards interest using this method.
Balance transfer credit cards
Another effective method that will help you in paying off bills related to multiple credit cards is by transferring the balance of your multiple credit cards to a single credit card by opting for a balance transfer credit card. Many a time under introductory schemes, you may get the balance transfer credit cards at a very low-interest rate. This option helps you in saving money as you will have to pay low interest on a single credit card.
Go for a personal loan
Opting for a personal loan and then paying off the bills of your multiple credit cards through the personal loan amount is another method for paying off multiple credit cards. The interest charged on credit cards is very high as compared to the interest charged on a personal loan. On an average basis, a credit card charges a monthly interest of 3.5% which annually comes out to be 42% but on a personal loan, you pay an interest of 9-12% annually which is more than ⅓ rd of what you pay on a credit card. You can effectively use this loan amount and pay off your credit card debts. After paying all the credit cards, you will be left with only 1 installment that you will have to pay, and that too at a reduced rate of interest. Using this method to pay off multiple credit cards is quite effective as you can save a lot of money that you would have otherwise paid as interest charges.
Credit cards prove to be very helpful in tough times but can be destructive too if not used wisely. Owning multiple credit cards is a great option as you can earn rewards and cashback on the basis of your spending using a particular credit card but you have to be very careful about the bills that will be generated for each credit card. You have to keep in mind the dates of the respective bills and pay for them before the due date. But in case of carelessness, where you do not pay your bills owing to the credit cards, these multiple credit cards can prove to be very harmful. All the ways mentioned above can be quite an effectual clearing off the credit card debts Additionally you can set up an auto-pay option for all your credit cards.
The benefit of this is that you will not have to worry about the due dates of the individual credit cards and bills will be automatically paid through your account. The most important thing is to keep paying your bills on time so that you do not attract any interest charges on your bills. And if by chance, you are stuck in a debt trap, choose any of the strategies mentioned above and start paying off your bills otherwise more interest will start piling up, and hence will get difficult for you to clear off the bills.