Why Paying Off Your Credit Cards Could Be the Smartest Move You'll Make All Year

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  • You may have different financial goals you want to achieve before the end of 2022.
  • It's a good idea to make paying off credit card debt a priority.
  • You can achieve this goal by picking up a seasonal side hustle.

It's a matter of saving money.

Now that December has arrived, you only have a few more weeks left to work on the different goals you set for 2022. Some of those goals may have been personal, others may have been financial. And if you started off the year with credit card debt, you may have established the goal of whittling down your balance to $0.

If you're not there yet, worry not. Paying off any amount of debt is a great thing, and besides, you still have about another month left in 2022 to make even more progress. But if you have the option to pay down more or all of your credit card debt in the coming weeks, it's worth jumping at that opportunity. Here's why.

You'd probably rather not throw money away

Any time you carry a credit card balance forward, you cost yourself money by accruing interest on the sum you owe. Meanwhile, credit cards are sneaky in that they tend to compound interest on a daily basis.

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As a very basic example, you might start off with a $100 balance on your credit card on Day One. By Day Two, that balance might be $100.25. But on Day Three, you'll be charged interest on that $100.25 -- not just your original $100. And so credit card interest charges really have the potential to spiral.

That's why paying off your credit cards is a really smart move -- one that could save you a lot of money. Or, to put it another way, paying off your credit card debt could stop you from continuously throwing money away on interest. And so it's worth doing.

How to pay off your credit card debt quickly

You may still have the goal of paying off your credit card debt by the end of the year. If you don't have a very large balance, that may be possible by Dec. 31. But you'll need to spend and save carefully in the coming weeks, which may be a tricky thing to do during the holidays.

That said, if you get yourself a side job for the month of December, you may find that you're able to earn enough money to eliminate your credit card balance. And these days, a lot of businesses are still hiring due to the holiday rush -- even though the holiday shopping season began several weeks ago. So if you're willing to put in the time, you might manage to meet the goal of being free of your credit card debt by the end of 2022.

If that's not feasible, though, try not to get too upset about it. Instead, establish a goal of owing less money on your credit cards by the end of the year -- even if your balance isn't $0. The less of a balance you carry into the new year, the less interest you'll accrue. And you can use these same strategies -- spending carefully and working a side job -- to make that debt disappear as quickly as possible in 2023.

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