The best way to pay off credit card debt

The Best Way To Pay off Credit Card Debt: From the Snowball To the Avalanche

The Harvard Business Review recently published a study on “the best strategy for paying off credit card debt.” Set aside for a moment the idea that you should try not to rack up credit card debt in the first place (shit happens, no judgment). This study benefits the millions of Americans who are literally $800 billion in collective credit card debt according to the Federal Reserve. So it’s a problem that needs a solution.

The researchers tested a couple of different methods for credit card debt reduction:

  1. Dispersing payments equally across every credit card each month.
  2. Concentrating as high a payment as possible on one account at a time.
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How to Instantly Increase Your Credit Score

How to Instantly Increase Your Credit Score

If you’re trying to improve your credit rating, then one way is to lower your credit utilization ratio. That is, the amount you owe compared to the amount you could borrow.

It’s usually better to just pay down the principal, but sometimes that’s not possible. If you’re confident in your ability not to abuse it, raising your borrowing threshold will give your credit score an instant boost.

I’d assumed this was a complicated process requiring some degree of cringing. But it turns out increasing your credit limit is extraordinarily easy. An educator in my city’s free first-time homebuyer program described this method to me. I will try to transcribe it exactly as she said it:

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How to Build Good Credit Without Going Into Debt

How to Build Good Credit Without Going Into Debt

As we’ve discussed, adult human beings need credit—good credit—to do lots of important adult things such as renting apartments and buying cars. But having debt, whether it be in the form of a balance on a credit card or just Ye Olde Stvdint Loane, can be fucking terrifying.

Fear not, gentle readers. For there is a way to build up good, healthy credit while neither increasing your debt nor your risk.

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