When your income comes in fits and starts — say, because you are self-employed or work for an hourly wage — some of the usual advice for paying off credit card debt can seem straight-up ridiculous. These strategies can smooth your way.
Knock out minimum payments early
With credit card debt, making at least the minimum payments on time each month is a must. But you don't have to wait until it's due to pay.
For those with an unpredictable income, schedule payments by the first of the month. But don't stop there. Making additional payments throughout the month as your income comes in will bring down those balances faster and save you interest.
Make a plan based on your worst month
While blogger Lydia Senn was paying off $13,000 of credit card debt on an irregular income, her approach to budgeting was simple: Make a plan based on the smallest paychecks. "We estimated, kind of going off the idea, 'Well, what if I don't have any freelance work this month? And what if there's no overtime?' " says Senn.
Put windfalls to work
While tackling her household's credit card debt, Senn always paid at least $200 more than the credit card minimums. But some months, she was able to pay more. "Whenever I got more freelance income, whenever there was a bonus or overtime or anything like that, all of the extra would go [toward paying off credit card debt]," she says.
Plan ahead as much as possible
For Rachel Carlson of Seattle, planning as far ahead as possible makes it easier to pay down $3,000 of credit card debt on an unpredictable income. Armed with a planner, "I can map income and expenses at least a month ahead." By noting when bills are due and when paychecks from her jobs are expected to come in, she can more easily estimate how much she can afford to put toward her debt each month.
Make sure you are not undercharging clients
For self-employed workers like Carlson, there's a challenge to knowing what to charge clients. "For the first year, year and a half of my teaching artist career, I really lowballed myself," Carlson says. But now, she's more confident about asking for higher rates. Research what other people in your field are charging for the same work, and if it makes sense, raise your rates.