Paying Off Credit Card Debt

This is the first article I am writing based on reader request.  This person wanted to know how they could pay off credit card debt.  This is a situation that many people are in.  I hope if this is your situation you would like to get out of it so you can save more and have less financial stress.  Let’s see the options.

The first steps

The first thing you must do is set your spending below your earnings.  If you spend more than you take in after taxes then your balances will go up and you will NEVER get out of debt.  So once you have done this, stop using your credit card.  You are earning more than you spend, so now there is no need for credit.

Pay more

So the amount of credit card debt makes each person’s situation unique.  If your debt is 10% of your annual income it is much easier to pay off than if it is 110% of your income.  But in any case you can overcome it is just a matter of time.  Use your extra money to apply toward your credit card bills.  You may think you should have some money for emergencies, but you could also use your credit card for that, even to pay rent, but with a fee.

Lower your interest rate and balance transfer

As you can see in my picture, if I paid only the minimum payment it would take 27 years to pay off my card.  In order to reduce the time, you must pay more or have a lower interest rate.  Pick up the phone and call your credit card to see if they can lower your rate.

Another way to reduce your interest rate is through a balance transfer to a new card which has a 0% rate for a certain amount of time.  Say you have $20,000 in debt at a 14.99% rate.  Paying the minimum amount you will pay a bit under $3,000 in interest in a year.  If you have a transfer the balance to a card with a one year 0% promotion and 3% transfer fee, then you will pay $600.  There are many hazards to this approach.  First, you need to get approved for the card.  Next, the card should have a rate lower than what you currently have after the promotional period.  Search for the best card for you, but one suggestion I have is the Discover It Card which has 14 months at 0% and 3% fee.

More options

If you can’t get a card with a 0% promotion then maybe you can lower your interest rate by taking out a loan at a lower rate.  Beware here as well because many times you will be charged an origination fee.  I previously wrote about consolidating debt, so check it out.  There are many companies such as Lending Club, Earnest, and more.


Getting out of debt is no easy task, but certainly worth the battle.  Take steps to lower your expenses so you can have more money to apply to your debt.  If you lack ideas check out my other articles because I have thought of many ways.  Wish you the best.


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