MoneyLife

How To Get Out Of Credit Card Debt in 10 Steps or Less

By Laura Smith
how to get out of credit card debt

Credit cards can seem appealing, especially since they make it easy to buy things even when you don’t have money readily available to spend. However, frequent overspending on a credit card can easily lead us to poor money habits.

Getting into the habit of spending money you don’t have can lead to massive amounts of debt. In fact, the average credit card debt borrower owes more than $5,111. So, what can you do about it, and how do you get rid of your revolving debt?

Eliminating credit card debt in 10 steps

The easiest way to get rid of credit card debt is to reduce the amount of money you’re spending each month and instead use that extra money to pay off the balance of your credit card. You need to get ahead of your interest so that you can efficiently get to a $0 balance and remove yourself from the credit card debt cycle. 

This is easier said than done. It can sometimes seem impossible to pay off your credit card debt, but it doesn’t have to be that way. If you want to get out of the credit card debt cycle, you’ll need to find ways to stop buying and start saving. It all comes down to saving more than you spend.

If you’re looking to eliminate your credit card debt, check out our top tips below.

1. Know your billing cycle dates

If you’re not aware of the dates your payments are actually due each month, you

could end up racking some unnecessary fees on your credit card statement. Each creditor will have a different payment date, so make sure that you understand this date and pay off your balance before the end of the month. 

This helps you avoid holding a high balance, which can affect your credit score, as well as avoiding any interest fees or late fees from lack of payment.

2. Make snowball payments

With the snowball debt method, you’re allowing yourself to have small victories

along the way. The idea is to pay off the debts that are the smallest first. Then, take the amount you were using to pay off your first debt into paying off the bigger debts, which is similar to a snowball growing as it rolls down the hill.

3. Get rid of your gym membership

Did you know that out of everyone in the United States that pays for an active gym membership, only 49% of people go to the gym at least twice a week? Even worse, only 24.2% make it to the gym at least once a week. 

Plus, the remaining 17.5% never even use their membership. If you currently have a gym membership, it might be a good idea to re-evaluate if it’s worth your money.

If you go to the gym consistently, then feel free to keep it. However, if you signed up in January and still haven’t used it, quit your membership to save that additional fee each month. You can use free platforms like YouTube to find free workout classes.

4. Take charge of your budget

Do you know how much you spend each month and what your money goes to? If you’re not actively tracking your purchases to ensure you’re sticking to your budget, it can be hard to pay off your credit card debt. 

If you’re unable to track it yourself, consider using a personal financial tracking app, like MoneyLion, to keep you on track. This application will help you assess how you spend, keep you focused on saving, and allow you to monitor your credit score.

5. Consider the avalanche method

Opposite to the snowball method, the idea behind this payment method is to pay off the card with the highest interest rate first because that card will end up costing you the most in the long run. 

To successfully do this, you’ll want to make the minimum payment on all cards, and then put any extra cash towards the card with the highest interest rate. While it will take longer to pay off each card, it will guarantee the least amount of interest payments.

6. Avoid brand names

Your local grocery stores will often work with big brands to create the same product with the grocery store’s name on it. This is known as a store brand. These usually are less expensive than big brand names. 

Swapping brand names with store brands saves customers an average of 25% on their orders. Plus buying off-brand makes it easier to find high-quality, organic, store-brand products for far less money.

7. Rent books and movies from the library

Instead of going out to the movie theater and spending $80 for your family to watch a two-hour movie or spending money on overpriced hardcover books, head to your local library.

By signing up for a library card, you’re able to rent tons of books and movies for free! Plus, if there’s something you can’t find, the librarians can usually get it shipped

from another branch in no time.

8. Consider a balance transfer

If you’re struggling to pay your credit card debt because of the high-interest rates, it may be time to consider a balance transfer. The idea behind a balance transfer is to take the balance of a card with a high APR and put that balance onto a card with a lower or delayed APR. This will help relieve you of those pesky interest charges.

9. Avoid upgrading technology

Every advertisement tells you that you need the newest phone, television, or camera to be happy. There’s a lot of pressure to keep up with the latest trends. But electronics can be pricey, often costing between $100 to $1,000 for just one item! 

However, if your technology isn’t broken, avoid purchasing a newer, more expensive item to save yourself some money. Use the money you save to pay off your credit cards sooner.

10. Pay off debt with a lower interest rate loan

If you have too many credit card debts with high interest rates, you might want to consider paying off some debt with a lower interest rate loan, like the Credit Builder Loan from MoneyLion. Not only will this help you get rid of interest rates that are way too high, but it also keeps your payments affordable and predictable.

Plus, you won’t need a credit check in order to get approved, you’ll just need to link your checking account, making it accessible to obtain the credit builder loan.

Pay off your credit card debt with manageable small steps

Credit card debt can feel overwhelming, especially as the interest rates climb, fees are tacked on, and companies continue approving you for high credit limits. It’s essential to take small steps to make your credit card debt more manageable so you can pay it off. 

By following the steps above, you’re helping yourself save money while still making hefty payments on your credit card debt. Still not sure where to start? Check out our article on how to stop spending money.

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