Here Are 3 Ways ‘Robots’ Can Help You Pay Off Debt Faster

Robots want to help you pay off your debt.

OK, “want” is probably a bit of an overstatement — artificial intelligence doesn’t possess feelings (so far). But they’re capable of helping you pay off your debt faster than going it alone with your human brain.

Plenty of us could probably use at least a little help, considering outstanding credit card debt clocked in at $890 billion at the end of the first quarter of 2020, according to the Federal Reserve — before the coronavirus pandemic made its full impact on the economy.

And let’s face it: You’re probably already using artificial intelligence to manage your finances — when’s the last time you spoke with a bank teller?

But we’ve found three tricks for using technology to help you pay off your credit card debt faster. Don’t overload your circuits trying to figure out how before you read on.

3 Personal Finance Technology Tricks to Help You Pay Off Debt Faster

If you’ve watched your credit card balance continue creeping up every month, try these technological tricks to help you put a dent in your debt.

1. Automate Bi-Weekly Payments

Although you might already use the automated payment option for your credit cards, you can make even better use of this technology by scheduling biweekly payments. How?

Let’s say you make a monthly credit card payment of $500. If you pay that amount each month, you’ll make 12 payments each year for a total of $6,000.

If you make biweekly payments, you pay $250 every two weeks. But because there are 52 weeks in a calendar year, you’ll end up making 26 half payments or 13 full payments each year, for a total of $6,500.

That reduces your principal by $500 in one year and thus reduces the amount of interest you’ll pay on the remaining balance.

And because credit cards charge interest daily when you carry a balance, biweekly payments also help you avoid accruing additional interest in those 14 days between payments.

2. Put an End to Late Payment and Overdraft Fees

It’s tough to get ahead of your credit card balance if your brain short circuits on due dates and account balances. You end up wasting money on fees that you could have used to pay off your debt.

And although these uncertain times may have messed up your internal clock (what day is it?), the electric bill is still due.

So let those tiny robots inside your phone help.

Downloading apps from your various financial institutions and lenders can help you gather all your accounts in an easy-to-access place, allowing you to track your balance in each account, check due dates quickly and even ask for assistance if you can’t afford a bill this month.

3. Set Up Direct Deposit for More Than One Account

When you’re focused on a goal — like paying off credit card debt — you can become susceptible to tunnel vision.

That’s where you only think about the balance and how much money you can possibly throw at it each month. But doing so could cause you to deplete any savings you may need to rely on in an emergency.

To avoid putting yourself in a crisis situation where you once again need to rely on credit cards, you should create a separate emergency fund.

But if your direct deposit is funneled into a single account, your poor human brain may have trouble delineating between what is savings and what is spending money.

By automating a split deposit, you can send a fixed amount or a percentage of your paycheck to a second account, whether it’s a savings account or an investment account — or even just another checking account.

That split can let the banking borgs build a nest egg in one account while you focus on using the money in the other account for debt paydown.

And if you’re wondering, the polite way to show your appreciation for technology helping you pay off credit card debt is to say, “Thank you very much, Mr. Roboto.” (Duh.)

Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder — read her bio and other work here. Her robot puns are a bit rusty, but you can catch her on Twitter @TiffanyWendeln.