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Written by: Colin Kosco


Do you feel helpless and overwhelmed by the growing size of your credit card debt? If so, you are not alone! Credit cards can be useful tools, but they are also incredibly easy to misuse and, of course, unexpected expenses pop up that you just have to pay for.


The average American household has over $6,000 of credit card debt as of the end of Q3, 2021 according to the Federal Reserve Bank. Whether you have more or less than the average, having any credit card debt that’s accruing interest can impact almost every other aspect of your life can spiral out of control if not handled quickly.


Rising to the challenge of eliminating this debt might seem impossible or unreachable, but it’s not. You can do this, and we’re here to help! To get you started, we’ve outlined how to get rid of credit card debt in 3 steps as well as a few helpful tips to keep in mind along the way. Remember, this information doesn’t guarantee you success, but it can help you get started.


Related: How Many Credit Cards Should I Have?

how to get rid of credit card debt

#1 Review Your Cash Flow & Maintain a Budget

Updating and maintaining a monthly expense tracker can shed light on your spending habits, where improvements could be made, and the overall dollar value that could be gained by making certain changes. You will also gain a better understanding of what you can and cannot afford during a given month.


Although this exercise is very simple in nature, it provides great value as it gives you the information necessary to make changes and get on top of your debt.


The budget doesn’t need to be super complicated. A good start would be to write down your mandatory monthly expenses and make a good effort to identify most of your variable expenses. We also covered budgeting in another short log post that would be worth your time: Financial Planning 101: Spending


Examples of Mandatory Expenses Examples of Variable Expenses
Rent or mortgage payments Restaurants and fast food
Utilities Travel
Groceries Entertainment
Insurance payments New clothing/gadgets
Student loan payments Subscription services


Although it will be difficult giving up some of your variable expenses, it will help you get rid of credit card debt a little bit faster.


After outlining your mandatory and variable expenses, prioritize them to determine which can be reduced and/or stopped altogether to free up some cash flow each month. This can also be a great time to improve your spending habits in general.

How to Pay off Credit Card Fast

#2 Determine Your Payment Strategy

On top of each credit card’s required minimum payment, do whatever you can (legally of course) to increase your payments as much as possible. The two most common strategies for debt repayment are the ‘Avalanche’ method and ‘Snowball’ method.


Resource: Debt Avalanche vs Debt Snowball: What’s the Difference?


Method 1: The Avalanche Method

This is mathematically the fastest way to eliminate debt.

Start by writing down your credit card balances and their corresponding interest rates in order from highest interest rate to lowest interest rate one the side of your budget.

Then, allocate any extra cash you can towards the credit card with the highest interest rate, while paying the minimum on every other card/loan you have.

After the highest interest rate card’s balance is eliminated, reallocate the extra cash towards the next highest interest rate credit card until it’s also paid off entirely.

Continue this ‘avalanche’ effect until all your credit card’s balances are eliminated.

 Resource: How to Use Debt Avalanche


Method 2: The Snowball Method

The second most common debt repayment tactic involves focusing your higher payments towards the credit card with the lowest balance until it’s paid off. Then, similar to the Avalanche Method, that higher payment is moved to the next lowest balance credit card until it’s paid off.

By paying off smaller balances first, the idea is that you’ll feel a greater sense of progress and gain momentum to motivate you to continue.

Despite its catchier name, this strategy is less efficient at reducing the amount of compounding interest each month, which means you end up paying more interest overall.

 Resource: More about the Snowball Method


Whatever strategy you choose, paying off your credit card debt will help improve your credit score significantly. Among other factors, your credit score calculation puts a higher value on you having a lower debt-to-income ratio and a history of making full, timely payments consistently each month.

how to get rid of credit card debt

#3 Keep Going!

Maintaining your resolve and optimism while completing any daunting task is critical and tackling credit card debt is no exception. Just keep telling yourself “It’s a marathon, not a sprint”, you’ve got this.


However, if it does become too much to handle, ask for help! Just like you might join a study group to learn about other people’s strategies and tricks, talking to others who care or might be in a similar situation to you can help you to hold yourself accountable and stay focused on your goal. Asking a close friend or family member for their help – financially or otherwise – could be that extra boost you need to keep you on track.


4) Consolidating and Refinancing Options

I saved these options for last because they can be a very slippery slope that can lead to an even worse situation. Be careful and don’t lose sight of your main payment strategy.

If you have a good credit score, you may be able to transfer your credit card balances to a new credit card with a temporary 0% interest rate. Transferring some or all of your debt onto a 0% credit card can significantly reduce or stop additional interest from accruing. However, you will have a limited time to pay off the new card before it also starts accruing interest.

Bankrate.com maintains an updated list of some good balance transfer cards.

It may also be worth looking into getting a personal loan from a bank to consolidate your credit cards into a new loan that, ideally, has a lower interest rate. This might help you save money on interest, but you may also have to make higher monthly payments that you would with your credit cards. Again, tread carefully here.

Bankrate.com also has a list of some good debt consolidation loan options.


Related: 5 Ways to Consolidate Credit Card Debt


Balance transfer cards and personal loans can seem like great solutions, but they only serve to save you a little bit of money on interest. The goal is still the same and you must continue to manage your budget as well as you can to aggressively pay off these debts. Don’t use these as an excuse to spend more and create an even bigger challenge for yourself.


Helpful Tips:

  • Continue updating your monthly budget and pushing yourself to spend less to squeeze out more cash that can then be allocated to the monthly payment.
  • Instead of waiting for the end of the month to make your payment(s), try making this payment at the beginning of the month. This can help reduce your non-essential purchases each month.
  • Keep your eyes open for additional opportunities of earning more income, such as working more shifts, starting that side gig you’ve always held off on, mowing your neighbors’ lawn, etc. Every dollar counts!
  • Try to avoid using your credit cards for any purchases until all your card balances are paid off.
  • Lastly, keep reminding yourself this isn’t a sprint, it’s a marathon that requires patience and perseverance!

Disclosure: Investing involves the risk of loss, including total loss of principal.  This should not be construed as individualized investing advice.  Consult with your investment advisor to develop an appropriate investment strategy for your circumstances.  This should not be construed as individual tax advice.  Consult with your tax professional for specific tax ramifications for your circumstances.



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