Balances in the United States rose to $1.21 trillion in the fourth quarter of the year 2024, according to the Federal Reserve Bank of New York's Center for microenomic data.
With respect to NerdWallet study on credit card debt, among household that had revolving credit card debt in September 2024, the average amount was $10,563.
In case you are among the several individuals with credit card debts, but you are now willing to pay it off, then you might want to consider our options in this article.
Paying off a credit card debt might be easier than you think especially once you apply the right strategies. The key here is developing an amazing plan and then sticking to it properly.
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How Do I Pay Off Debt On Multiple Credit Cards?
If you have a balance on more than one credit card, then make sure you always pay at least the minimum on each card and then focus on paying down the total balance on one card at a time. You are able to select which card you target in one of two ways:
High - Rate Method
You first of all need to check the interest rate section of your statements to see which credit card charges the highest interest rate. Focus on paying off that debt first. This method will save you money by simply reducing your total interest payments and it also eliminates debt faster.
Snowball Method
With the snowball method, you first of all need to pay off the card with the smallest balance first. As soon as you pay the balance in full, you now take the money you were paying for that debt and use it to help pay down the next smallest balance.
Though this method cost a little more in time and money, but it has psychological benefits. You might feel a sense of accomplishment after paying off that first card and feel motivated to continue to the next one.
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Is It Smart To Pay More Than The Minimum?
Take a good look at your credit card statement. If you pay the minimum balance on your credit card, it takes you much longer to pay off your bill. However, if you decide to pay more than the minimum, you will pay less in interest overall and this is beneficial to you.
It is your card company's duty to chart this out on your statement in such a way that you see how it applies to your bill. You can also reduce interest charges if you pay your bill as soon as you get it.
NOTE: From my own experience with credit card debt, I will advise you to pay as much above the minimum payment as you can to chip away at your balance. Every additional dollar goes forward your balance and the smaller your balance, the less interest you will need to pay.
How Does Debt Consolidation Work?
Consolidating your debt lets you combine several higher interest balances into one with a lower rate, so you can pay down your debt faster without increasing payment amounts.
Below are two common ways to consolidate your debt.
Transfer Balances
You can try taking advantage of a low balance transfer rate in order to move debt off high-interest cards. Fees are often 3 to 5 percent of the balance you transfer, but savings from the lower interest rate may often be greater than the transfer fee. If you are considering this option then be sure to factor this in.
Tap Into Your Home Equity
If you got equity in your home, you may be able to use it to pay down card debt and a home equity line of credit may offer a lower rate than what your cards charge. Be aware that closing cost often apply.
If you want to consolidate your debt, you should keep in mind that it is important to control your spending so as to avoid racking up new debt on top of the debt you have already consolidated.
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How Can I Free Up Money To Pay Off Credit Card Debt?
Freeing up some cash for your credit card payment is similar to establishing a monthly budget which includes the amount you need to spend monthly on groceries, transportation, housing and entertainment.
Your credit card statement can be a helpful tool here since numerous issuers categorize your spending. Look for areas where you can cut back, such as non essentials like entertainment and dining out, as well as fixed monthly expenses like your car insurance or cell phone plan.
Pay With Cash
One amazing way to manage your overall debt is to consider purchasing things with cash. Using cash or debit card can help you avoid overspending or making impulse purchases and more to that, you also eliminate any extra fees that may apply when you pay with a card.
By doing this, you will also have a better understanding of how much enters and exits your hands on monthly basis.
Use Financial Windfalls
Commit raises, bonuses or other financial windfalls to debt reduction rather than adding these funds to your monthly spending pool. Using this "extra" money to chip away at your debt can help you reach repayment goals faster.
How Do I Avoid Getting Into Credit Card Debt Again?
In order to avoid falling into credit card debt again, you need to create a budget, which will help you handle your income and expenses properly.
You might also want to take a look at why you spend. Understanding the feelings behind your actions can help you reduce spending. Below are other applicable steps to help you reduce credit card debt:
- Pay with cash rather than credit cards, whenever you can. If you must use a credit card, then try to pay it off every month.
- Deactivating one-click buying in order to make yourself type in your credit card details every time.
- Establish a 24-hour cooling off period before you buy an item. This involves putting the item in your cart, letting it make 24-hours there before you click pay.
Can I Use My Other Credit Cards To Pay Off Debt?
No you cannot directly use one credit card to pay off another. There are other credit card features you could use, but you may end up deeper in debt if you are not careful with this approach so I will not advise to even use it in the first place.
Final Thoughts On How to Get Out Of Credit Card Debt
Getting out of credit card debt quickly isn’t easy—but it’s absolutely doable. With the right mix of determination, smart planning, and consistent action, you can break free from debt and start building a healthier financial future. Start today—the sooner you begin, the faster you’ll be free.