Quick tips On Velocity Banking for Decreasing Credit Card Debt

What is Velocity Banking?

At its core, Velocity Banking is a strategy to pay down debt faster using a line of credit or a credit card. The idea is to leverage these tools to reduce the interest you pay on your credit card, thus accelerating your debt repayment schedule.

• Important: You have to promise yourself you won’t spend the additional credit limit that you free up on unbudgeted expenses. Just remember, if we could do that, we probably wouldn’t be in this predicament in the first place.
• Designate a card to make payments with…choose card with highest percentage percentage rate. Or perhaps card you want to kill first. 
• Figure out what payments and expenses will be for the month. Move payments to this card. Move any payments that are currently on your debit card. Use this card to pay for budgeted expenses. Setup to Pay bills that will take a credit card. Paypal billpay is nice if its an option. 
• Put cashflow that you pay anyways from checking or debit into the designated credit card as soon as your income comes in.
• Eventually it ends up lowering your daily balance a little. And that savings in interest becomes part of your paydown. 
• The daily balance goes up again as things are paid out. But as long as you stay below your spending budget, it will trend downward. 
• Credit score should go higher since you will have less credit utilization, giving you better offers and options later.