A financial expert who retired at the age of 36 has lifted the lid on her simple but effective tricks to pay off credit card debt fast.
Rachel Covert, 37, of Massachusetts, quit her corporate job last year and now works as a part-time money coach, teaching professionals how to build wealth through automation and investing.
The former vice president of the fashion brand is known as @rachel_talksmoney on TikTok, where he shares helping people ‘solve their financial problems’.
Covert went viral after sharing his best advice for paying off debt faster, saying it’s so effective credit companies definitely don’t want you to know about it.
Money coach Rachel Covert, 37, of Massachusetts, has shared her best trick for paying off debt faster, saying it’s so effective “the credit companies definitely don’t want you to know about it.”
Covert’s first piece of advice is to stop using your credit cards once and for all
“Credit card debt is really frustrating and very difficult to pay off and one of the reasons is that it adds up on a daily basis,” he explained. ‘That means every day, the money you owe them is growing.
‘And it’s not just a little bit of interest on what you paid on the credit card, effectively the things you borrowed, it’s also all the interest you already owe them. So it grows very fast and it can be very difficult to pay for it.’
Covert’s first piece of advice is to stop using your credit cards once and for all.
“Number one, get your credit cards out of your wallet, remove them from your phone, remove them from Apple Pay, and stop using your credit cards altogether,” he said.
The money coach’s second tip is to “start making credit card payments several times a month.”
“You don’t have to pay off your balance in full multiple times a month,” he said. “But take the amount you set aside to pay off your credit card, let’s say it’s $200, instead of paying once a month at $200, break it into four payments of $50 and start making payments every Friday to your card of credit”. debt.
The second piece of advice from the financial expert is to “start making credit card payments several times a month” to reduce your interest.
Instead of paying $200 once a month, he explained, he should divide that amount into four payments of $50 and start making payments every Friday.
“The reason this works is that every time you reduce the amount you owe them, you’re recruiting less and less interest,” he said.
Covert’s video has been viewed more than 400,000 times and has received nearly 1,500 comments.
“The reason this works is that every time you reduce the amount you owe them, you’re recruiting less and less interest,” he said.
“So if you’re having trouble paying off your credit card debt, this is one of those little things that can make a big difference over the life of the loan.”
Covert’s video has been viewed more than 400,000 times and has received nearly 1,500 comments.
“I’ve been doing this for the last 2 years and it reduces interest,” one fan wrote.
‘Getting rid of your credit cards sounds silly but it works!’ another agreed.
‘I love this! Great advice. Keep them coming!!’ someone else added.
Covert elaborated on his multi-pay hack in a more recent video, saying that most people mistakenly assume that credit card interest is only charged once a month.
Covert said he advises people to have a small emergency fund before they start paying down debt to make sure they don’t use their credit cards in a hurry.
Covert elaborated on his multi-pay hack in a more recent video, saying that most people mistakenly assume that credit card interest is only charged once a month.
‘That is not the case. Credit card debt is calculated daily,” he explained. ‘They take the debt you already owed them from the days before you had a credit card balance and add it to the principal when they calculate your debt on a daily basis. This is called compound interest. Your credit card debt is growing every day.
“You definitely need to make at least the minimum payment each month, (but) you should strive to make much more than the minimum payment,” he advised.
“And if you can do that in two, three, or four payments in any given month, you’re helping yourself fight credit card debt simply by reducing the amount of interest you earn every day.”
However, he pointed out that there is a caveat in his trick.
“Personally, I don’t believe in paying off your credit card debt until you have at least a small emergency fund,” he said. “That’s because what tends to happen is if you’re using your credit card as your emergency fund, you’ll pay off a little bit of the debt and then just put it back on the credit card, and you’re back to square one. .
“So by having a few thousand dollars in a savings account like a high-yield savings account that protects you from having to use your credit card and getting further behind on your credit card debt again.”