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How to Pay Off Credit Card Debt

If you’ve got credit card debt, it can feel like the life is being drained from your income every month. Purchases from months ago are haunting you and holding you back from doing what you want with your money today.

We get it. We’ve felt the weight debt can put on you. And. It. Sucks.

The good news is, it doesn’t have to stay like this. Use the tips and info here to learn how to pay off credit card debt. Put this month’s income back into this month. And then you can start putting more of it toward the future you want.

How to Pay Off Credit Card Debt: 7 Tips
What Are Other Credit Card Repayment Methods—and Do They Work?
What Is the Quickest Way to Pay Off a Credit Card?

How to Pay Off Credit Card Debt: 7 Tips

Here are our seven favorite, time-tested and proven ways to pay off credit card debt:

1. Get on a budget.

Money goals can’t become money realities without a budget. Why? A budget is a plan for your money—Every. Single. Dollar. If you don’t plan out where your money is going, you’ll never know where it went. You’ll never be able to tell it exactly where to go.

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And you want to tell your money to go toward paying off credit card debt, right? So, get on a budget!

Start by listing your income (everything coming in). Then write out your expenses—starting with your Four Walls (food, utilities, housing and transportation). You can put in your other expenses after that.

Once you’ve got all your expenses accounted for, subtract them from your income. If you have money left over, put it to use paying off credit card debt! If you’ve got a negative number, it’s time to tighten up those other budget lines until you get a zero-based budget. (That means your income – expenses = zero.)

Okay! Now you’ve got a budget. How can you make it work for you on the credit card debt payoff journey? Keep reading!

2. Lower your bills.

Cutting back on your spending with those regular monthly bills is a great place to start freeing up cash to put toward paying off debt! You can do this by being more intentional with your electricity use, meal planning, buying generic—and so many other ways. 

You’re about to feel like you got a raise. So, make sure you’re also intentional about putting this freed-up money toward debt—not wasting it on unnecessary purchases!

3. Sort your priorities and drop some expenses.

Okay, it’s time to get a little radical. Are you ready? (Yes. Yes, you are.)

Look back at that budget. You trimmed it up. Now cut off some branches. It might hurt, but if you can take certain expenses out of your budget completely, that’s the real money saver.

What extras can you live without in this season? (And it’s just a season, we promise!) It’s not goodbye—it’s see you later.

Here are some common unnecessary budget lines you can delete (for now): restaurants, entertainment, subscriptions you don’t use regularly, cable, trips to the coffee shop. Be honest with yourself and your budget—what things can you live without while you’re paying off that credit card debt?

You aren’t cutting all the fun. Just get creative with budget-friendly fun and rewards! Hey—these sacrifices right now will make a huge difference for your future.

4. Make extra income.

With this tip, you aren’t freeing up and redirecting cash that’s already in your budget—you’re putting more money into the budget. Get yourself a side hustle! Drive for Uber or Lift. Deliver groceries with Shipt or Instacart. Resell your stuff with Poshmark or eBay.

Use the skills you have and tutor, give lessons, take freelance gigs. And you don’t even have to leave your couch. There are plenty of work-from-home jobs you can pick up full time (save money on gas and the commute!) or part time.

This is an investment of your time that pays off big. Step into the hard work—and make some awesome progress on paying off your credit card debt.

5. Stop using your credit cards.

If you want to get out of credit card debt, it’s time to break up with your credit cards. And you don’t have to have a nice dinner or a big conversation with them. Just put them on the table and say, “It’s not me—it’s you . . . You’re bad for me, my finances and my future. Goodbye.” And never look back.

If you stop using these credit cards, you’ll never run the risk of a credit card balance. Ever. Again. Start using a debit card and cash—your own real money—when you pay for things. Do this for you, your finances and your future.

Today.

6. Save a $1,000 emergency fund.

If getting rid of those credit cards freaks you out because you use them as an emergency fund, then get yourself an actual emergency fund as fast as possible.

Save $1,000 quickly. Leave it in savings as a buffer between you and those “life happens” moments. And trust us, it’s way better than a credit card. If you have an emergency and pay cash, you won’t be charged interest. Boom.

7. Use the debt snowball method.

Once you use these other tips to take control of, free up, or make more money, it’s time to start using that money to pay off your credit card debt. Right away.

Use the debt snowball method and start paying off your credit cards smallest balance to largest. Okay, we know you’re thinking all about those interest rates right now. But what you really need is a win. You need one of those credit cards gone. Quickly.

The debt snowball method is all about building your motivation and momentum by attacking one credit card debt at a time—and going after the one you can get out of your life soonest first. That quick win is super inspiring and key to getting out of debt. 

(Learn the exact steps to the debt snowball method in the What Is the Quickest Way to Pay Off a Credit Card? section below.)

use the debt snowball method to pay off your credit card debt

What Are Other Credit Card Repayment Methods—and Do They Work?

Look, paying off debt is never easy. And there’s a lot of buzz surrounding the idea of “quick ways” to get rid of your debt. Here’s the truth: There’s no quick fix. Those tips we just mentioned are the tried-and-true route.

But we don’t want to leave you in the dark. Let’s take a look at the most-advertised ways to reduce debt—and talk about why they’re so crappy.

  • Debt Consolidation. This is basically a loan that combines most of your debts into one single payment. This sounds like a good idea until you realize the life-span of your debt grows, which means you’re in debt longer. And the low interest rate that sounded so good at first usually goes up over time. 
  • Debt Settlement. Debt settlement companies will charge you a fee and promise to negotiate with your creditors or reduce what you owe. But typically, they just take your money and leave you drowning in the debt you already had—plus all the new late fees from when no one (no. one.) was paying on your balance.
  • Debt Avalanche. Unlike the debt snowball, the debt avalanche is a debt reduction method that focuses on paying off the credit card with the highest interest rates first. The problem with this method is rooted in motivation. Remember: Paying off debt is less about math and more about behavior. With the debt avalanche, your first targeted debt might take a long time to pay off. Your motivation will burn out faster than a short-wicked candle. Hey, you need quick wins to encourage you to keep going. The debt avalanche takes too darn long to see real progress.
  • 401(k) Loan. Never borrow from your 401(k) to pay off your debt. We repeat—never borrow from your 401(k)! Not only will you get hit with penalties, fees and taxes on your withdrawal, but you’re also stealing from your own future. 
  • Home Equity Loan. Also known as a HELOC, this kind of loan borrows against the equity you’ve built up and puts your house up as collateral. In other words, a HELOC trades what you actually own of your home for more debt—and puts you at risk of losing your house if you can’t pay back the loan on time. Don’t get a HELOC. Period.
  • Credit Card Balance Transfer. This is when you move all your credit card debt into one new credit card. You’ll get hit by transfer fees and risk going blind reading the fine print. Okay, that’s an exaggeration—but there’s no exaggerating that a huge spike in interest rates will hit you like a ton of bricks if you make one late payment. This is trading a bunch of problems for one bigger problem. Don’t. Do. It.

These debt reduction strategies are risky and really only treat the symptoms. You don’t need to consolidate, settle or borrow more money to deal with your credit card debt. You do need to change how you manage your money (using all those tips from above!).

What Is the Quickest Way to Pay Off a Credit Card?

We already mentioned the quickest (and best) way to pay off credit card debt is the debt snowball method. And this is how you do it:

Step 1: List your credit card debt from smallest to largest. (Remember: Don’t worry about interest rates right now.) Pay minimum payments on everything but the smallest one.

Step 2: Use all the extra money you’ve got from those earlier tips and attack the smallest credit card debt with a vengeance. Once that debt is gone, take what you were paying on it and apply it to the second-smallest debt (while still making minimum payments on the rest).

Step 3: Once that credit card debt is gone, take what you were paying on it and apply it to the next-smallest debt. The more you pay off, the more your freed-up money grows and gets thrown onto the next debt—like a snowball rolling downhill. It’s unstoppable. You’re unstoppable. That credit card debt doesn’t stand a chance.

Keep repeating those steps until the debt is completely gone. And don’t forget to close your credit card accounts after you pay them off. Then go ahead and dance like nobody’s watching, even if they are. You did it!

Okay—so all of this takes effort, sacrifice, focus and time. What if you could speed it up even more? Learn the plan to do just that in Financial Peace University—available only in Ramsey+. The average household pays off $5,300 in the first 90 days of working this plan. Imagine your life 90 days from now with at least $5,300 of your credit card debt gone. Forever. Check it out in a Ramsey+ free trial!

You’ve got what it takes. Use these tips, jump into the debt snowball method, try out Ramsey+, and don’t give up.

Don’t. Give. Up.

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.

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