5 Tips for Paying Off Credit Card Debt

Reader's Digest Editors 13 November 2018

Credit card debt is one of the most common and most preventable forms of debt. If you are dealing with outstanding credit card debt, and are feeling overwhelmed and discouraged, here are four strategies you can start using today to pay off your credit card debt and take back control of your finances.

1. Pay off higher interest cards first

If you have more than one credit card, regardless of balance, work on paying off the higher or highest interest card first. Interest fees can be killer, especially with some credit cards charging over 30% interest rates! Even though it can be tempting to pay off a lower balance, your efforts will be all-for-naught if your higher interest card is continuing to accrue interest that you’ll just have to pay off down the road.

2. Cut back on unnecessary spending

It may sound obvious, but to pay off credit card debt, focus on decreasing your spending so you can reallocate that money towards paying your bill. A great place to look to decrease spending is at any recurring monthly fees you’re currently paying, such as gym memberships, subscription services and cable and Internet. Is there anything you can justify cancelling? Many gym memberships also offer a “freeze” option, so you can stop getting charged and using your membership temporarily, but re-start it at a later date when you’re in better financial health.

3. Consider a balance transfer

If you trust yourself to get another credit card with 0% APR for the long-term purpose of paying off current ones with a high interest rate, then a balance transfer may be a valid option to help you pay off credit card debt. There are a number of balance transfer credit card options available that offer 0% APR balance as well as no interest fees. Check out this guide for a list of balance transfer card options that may work for you.

4. Consolidate your debt with a loan

If interest rates are seriously killing your payback plan, consider consolidating your debt with the help of a personal loan (or a credit card consolidation loan). With the help of a personal loan, you can consolidate debt from multiple cards into one balance that is typically repayable in an average of five years. Many banks offer these, so it’s worth starting a conversation to see if a personal loan is the right fit for you. If not, another option worth considering is payday loan.

5. Get some professional advice

It’s easy for credit card debt to spiral to scary levels. If your credit card debt is over $10,000, consider getting some insight or some National Debt Advice from a professional. They’ll be able to help you create a customized payback plan, and even make recommendations for consolidating debt or acquiring lower interest loans to pay off debt at a more reasonable rate.

Paying off credit card debt can seen incredibly daunting, especially if you’ve been at it for a while, but with the right strategy and mindset, it’s possible. Develop a plan and stick to it.