Do You Know The Secret To Paying Off Credit Cards Fast?

Speaker A00:01:20

Have you ever made a credit card payment, looked at the new balance and thought, that's it. You're sending money every month. You're being responsible.You're doing the work, but that balance is barely moving and it feels like you're running on a treadmill. Yeah, you're working hard, but you're going nowhere. First of all, friend, you're not crazy.Minimum payments are designed to keep you in motion without making progress. That's how banks make money, to be blunt.So today on the show, I want to shift from motion to momentum, and I'm going to show you a way to pay off those balances fast. Going to be a great show today. Hey, friend, Ralph Estep Jr. Here.Welcome to Financially Confident Christian, where I want to help you break that cycle of financial shame that so many of us live in and truly find confidence. And today's topic is something a lot of us deal with at some time in our life, and that's credit card debt.So today I want to talk about some smart strategies to pay off credit cards faster. And I got a special treat for you today. We've been talking about sending in your questions. Well, guess what?We've got a voicemail question that we're going to play right now. So here's our voicemail question for today.

Speaker B00:03:01

Hello, Ralph, I think I'm recording this. I'm faithfully making payments on my credit cards, yet it feels like I'm running on a treadmill.The balance barely moves, and it's hard not to feel discouraged. I'm doing the work, but I'm not seeing the breakthrough. I'm starting to lose hope.What's the smartest way to tackle this so I can finally see real progress and feel like I'm moving forward?

Speaker A00:03:31

Well, thank you so much for sending in that question and thanks for being one of our first voicemail people. And if you want to send in a question just like that person did, you can go to financially confidentchristian.com voicemail.It's super easy and I would love to hear your voice. But the big idea today is you need focus, not just faithfulness. So let's get into how to make this credit card debt get to be manageable.First thing I'm going to encourage you to do is stop spreading extra money across every card you have. I see so many people that make this mistake. I consider it the biggest mistake.If you send an extra $20 to five cards, you're going to feel busy, but nothing meaningful is going to happen because you're only sending a Little bit of extra payments to each one. So here's what I'm going to encourage you to do instead. Choose one Target card.Now, I'm not talking about the department store target, I'm talking about pick a target. For example, I really enjoy shooting, been shooting since I was a young lad, as my grandfather would say.And target practice is really important for me. And when I'm doing target practice, I put something in those crosshairs. Well, you've got to do the same thing with your credit.All your extra money goes to the one that you've targeted, the one you've put in the crosshairs. Now, don't neglect the other ones. Make sure you're making your minimum payments, but target the one with that extra money.Because what I have found is that focus, pressure, when you really focus in on it, it creates visible progress. Here's the second thing I'm going to encourage you to do. You got to pick a strategy. Now, we've talked about this on the show.The snowball or the avalanche method. Both of those are proven methods, and I'll visit those for just a second. Remember, the snowball is where you start your smallest balance first.You pay that off and it kind of snowballs. That's the whole reason for it. You pay the next one and the next one, but you start with the smallest balance.So mentally, psychologically, you see that you're making an impact. Now, the avalanche method is you start with the highest interest rate first.It's basically the method for us accountant types, the one that's costing you the most. But the problem with that one is you might not feel that motivation. That snowball builds the motivation fast.The avalanche honestly saves you more interest. But there's no right answer here. You got to choose the one that works for you, the one that you're going to stick with.Because in the end, momentum matters more than math perfection. Now, here's a little tip a lot of people don't think about. You can lower the interest rate when possible. A lot of people don't think about this.But pick up the phone or text, go on their website and call your credit card company, ask them for a rate reduction, say to them, listen, I've been with you for a long time. You see my payment history. Can you lower my interest rate? Now, they might not do that. You might look for another credit card.You can do a balance transfer. Now, I'm going to put a little caution on this. A lot of people think, well, I'm going to go get this credit card it's a 0% for six months.That's fine, but only do that if it reduces interest and you stop using all your credit cards. There's a trap here. A lot of people get stuck in this trap.They go and get that next credit card with a zero percent, and next thing you know, they're charging up two credit cards now. But when you have lower interest, this is a simple math thing.The lower the interest, the faster your principal reduction, because more of your money is going to principal. Here's another key thing you can do. Attack with what I call micro boosts. If you've got irregular money, add that to the target.Right now a lot of people are getting tax refunds. Add that to the target. Maybe a bonus. Maybe you work some side income or hey, maybe you sell some unused items.When I used to work for the credit union, I would tell my collectors if they called somebody and they couldn't figure out how to pay their bill, ask them what's sitting around that they don't use. You can sell some things. Maybe you get a little side job, grab some extra time at work if you can.Because even if you can find 200 or $300 extra, that can shave months off your timeline. And these boosts break that treadmill feeling. Here's another thing I'm going to encourage you to do.Track the principal reduction, not just the balance. Look at how much principal dropped this month. See, it's so easy to get stuck in looking at that balance.You get discouraged, feel like it's not going anywhere. Don't just look at the remaining total, look at where the principle is shrinking. Because then you're going to see your progress.And when you can live in that feeling of progress, that's going to fuel the discipline.And what I've seen people, I've seen people catch on fire doing this like once they started to see how this focused effort, that really, that focused effort creates a breakthrough. So here's your win for today. Simple thing today. If you're dealing with credit card debt, choose your target card and write it down. Put it on paper.That's the one you're going to focus in on. That's the one you're going to put in the crosshairs and all your extra money goes there. Just focus on that one thing and you'll see things happen.Because clarity will replace discouragement when you focus on one debt. Let's get into our Bible verse. This is Psalm 126. 5. Those who sow with tears will reap with songs of joy. And I just love this.It's such an encouraging Bible verse today, isn't it? Because what it's telling us is being consistent, sometimes painful effort. Think about sowing with tears.But that that painful effort produces real breakthrough over time. You didn't make this credit card debt overnight. You're not going to solve it overnight.But being consistent, sowing with tears, I promise you, you will reap songs of joy. How about we pray together right now, Lord? You see the discouragement my friend feels. You heard it in their voice today.They're trying, they're paying, but they're still tired. So, Lord, right at this very moment, I ask that you would help them renew their focus.Give them a strategy, Lord, and give them patience to stay consistent. Turn those tears into progress, Lord, and turn progress into momentum and let that momentum lead into freedom. And we ask this in Jesus name. Amen.Friend, I want to encourage you right now. You're not stuck. You just need some focused pressure.And if you're ready to stop feeling stuck and start seeing real progress yourself, I want to encourage you to head to financiallyconfidentchristian.com/voicemail and leave your question for me. You saw how it works today. It was super simple. I love listening to your voice. I want to hear. And it doesn't just have to be a question.Maybe you've got a struggle you're going through or hey, maybe you have a way to solve things as a triumph that you have. I would love to do a show about triumphs, things that are working for you.So go to financiallyconfidentchristian.com/voicemail and leave me a voicemail message. I can't wait to hear your voice and you might be featured on a future episode. Well, thank you so much for joining me today.I always say stay financially savvy because I want you to be financially savvy and financially confident. May God bless you and you have a great day today.