If you struggle to make minimum payments on your credit card, it may be time to end the struggle. The best time to tackle your high-interest debt is now, and if you use a combination of the most effective strategies, you’ll be well on your way to getting out of credit card debt.

Credit card debt can quickly snowball and get out of control if you don’t have a concrete plan to pay it off. When you’re struggling to make the payments each month, it’s easy to feel stuck. Regardless of how bad your situation may feel, there are many practical tips for getting out of credit card debt.

Total credit card balances outstanding stood at $1.13 trillion in America in 2023. With the surging cost of living, Americans are relying on credit cards more than ever. Paying off your debt successfully requires a personalized approach that starts with determining your best repayment strategy.

14 Tips To Reduce Credit Card Debt

Paying off credit card debt requires some planning, budgeting, and discipline. Consider following some of the tips we’ve listed below to get started. 

1. Read Your Statements

Your statement and the various disclosures included in it each month will provide you with a lot of helpful information, such as the required payment, due date, current interest rate, when and if a company can raise that rate, and how long it will take to pay off your debt if you only make the minimum payment. This is the information you’ll need to create a repayment strategy that works for you.

2. Transfer Debt to Lower-Interest Credit Cards

If you have multiple credit cards, compare the interest rate for each one. Transfer balances from high-interest cards to low-interest cards, wherever possible, to save money on interest.

3. Make Extra Payments

If you have a high-interest credit card, target it aggressively to lower your balances. Whenever you have extra money, put it towards this card so you can quickly pay off the entire balance.

4. Cut Your Expenses

If you use credit cards to impulsively purchase things you don’t really need, you’ll need to be more aware of your spending. Cut your expenses wherever possible and only use your card for emergencies to avoid adding to your debt.

5. Use Your Debit Card or Cash for Your Purchases

Use your credit cards only for emergencies. For everyday expenses, use your debit card or cold, hard cash so you’re more aware of how much you are spending.

6. Use Credit Cards Only for Emergencies

Just because you have a credit card does not mean that you can or should make use of all that credit. Maxing out the limits on your credit cards is financially dangerous. It increases your credit utilization ratio, which can lower your credit score dramatically.

You may think that you’ll be able to pay off your balance in relatively short order, but with the average U.S. credit card annual percentage rate (APR) of 27.92% as of Q1 2024, you will quickly find that the balance sticks around months later. Keep credit card debt at bay by using it only for emergencies. 

7. Make a Budget

Make a budget to get a clear idea about your income and expenses. List your monthly expenses such as mortgage, utilities, car loan payments, credit cards, entertainment, subscriptions, eating out, and anything else you pay for during a month. List your monthly income in another column.

If your income exceeds your expenses, you can use those funds to pay off credit card debt, build an emergency fund, or retirement savings. If your expenses exceed your income, you’ll either need to find a way to reduce some of your expenses or find a way to earn more income. If you don’t bridge the gap between your expenses and income, you may be tempted to fill that gap with credit card debt.

8. Pay Bills on Time

Always pay your credit card bills before your due date each month. Set reminders if necessary, make use of automatic payments wherever possible, and make it a habit to pay your bills ahead of time. Your payment history accounts for 35% of your credit score.

Missing payments or making payments late will result in late fees. Missing payments by 30 days or more will end up as a negative mark on your credit reports and lower your FICO scores by as much as 100 points.  Other than the added penalties that could have easily been avoided, you also risk hurting your credit score. 

9. Seek Credit Counseling

If your expenses and income are out of balance and if budgeting doesn’t come easy to you, you may want to seek credit counseling.

Credit counselors can help you come up with a realistic budget and provide you with personal finance strategies to get out of debt and stay out of it. Beware, however, of any credit counseling or debt management agency that asks for upfront fees before providing you legitimately helpful services and/or showing you real results in your debt management efforts.

The National Foundation for Credit Counseling is a good resource for finding reliable and trustworthy credit counseling companies.

10. Use Debt Avalanche/Snowball Repayment Method

Once you have a clear idea of how much credit card debt you owe, choose a debt repayment strategy to pay it off. The debt avalanche method focuses on paying off credit cards with the highest interest rate first. Once that is paid, you can focus your efforts on the next highest-interest credit card.

For many people, the debt snowball method is easier. The goal of this method is to pay off the credit card with the smallest balance first. This will give you the momentum and motivation you need to move on to the next largest debt and so on.

11. Enroll in a Debt Management Program

Many nonprofit credit counseling companies can enroll you in a debt management program. Your counselor can also negotiate with your credit card companies to negotiate new terms, lower interest rates, and waive off penalties. Counseling agencies will usually charge you a fixed fee per month for the service.

If you enroll in a debt management program, you’ll not be able to open a new line of credit for some time and will also have to close a few credit accounts.

12. Consider Debt Settlement

If you have a significant amount of unsecured debt, debt settlement may be a good option for you. This option is particularly helpful for those who have credit card accounts in collections or have low credit scores.

A debt relief company can negotiate with your lenders on your behalf to settle your credit card accounts and other revolving lines of credit for less than what you owe. These skilled negotiators can help you save up to 50% of your total debt before fees, so they can help you pay off your debt in a shorter amount of time and save money in the process.

13. Consolidate Your Debt

If you still have a “fair” to “good” average credit score (of 680+) but need help to keep up with debt payments on multiple credit cards, debt consolidation can help you. The main benefit of debt consolidation is a reduction in interest rates. A second benefit is improved ease of management.

With a lower interest rate and a single payment each month towards your personal loan, you’ll be able to chip away at the outstanding balance faster and save money on credit card interest charges.

You can apply for a 0% balance transfer credit card or a debt consolidation loan to consolidate all your credit cards into a single account. A balance transfer fee (of 3%-5% of the balance transferred) may apply if you choose to go with a balance transfer credit card.

14. Consider Bankruptcy as a Last Resort Option

If none of the options listed above work for you, you may want to consider filing for bankruptcy. Chapter 7 bankruptcy can wipe off all your unsecured debt after the bulk of your non-exempt assets are sold to pay back your secured debts.

With Chapter 13 bankruptcy, you can restructure your debts and pay them off over 3 to 5 years. Any remaining debt will be eliminated upon successful completion of your repayment plan. Bankruptcy and its residual after-effects will be reflected in your credit reports and FICO scores for up to 10 years, so this option does come with serious consequences.

Bankruptcy will not eliminate student loans and child support payments. Consider this option only when you have exhausted all other avenues, and ensure you’re aware of any limitations after filing for bankruptcy.

How People Get into Credit Card Debt

Nobody intends to get into debt. Here’s why and how you may find yourself in this position.

Credit Is a Positive Word and Concept

When you’re approved for a credit card by a credit card issuer, you feel that they’ve put their trust in you. In reality, the motivation of financial institutions is to profit from you, from the high interest you pay and the fees that sellers pay to credit card companies for the convenience of using credit cards as payment. For many people, it’s easy to be tempted to purchase things they can’t afford with credit cards.

Credit Cards Bank on Optimism

When you use your credit card to purchase a new TV, for example, you are optimistic that you’ll be able to pay off the outstanding balance from your next paycheck (or two). The potential problem with this is things don’t always turn out the way you plan, and you’re left with large outstanding balances when you don’t pay off your purchase in full when the credit card statement comes.

Credit cards Are Useful in Emergencies

If you’re affected by special circumstances, such as unemployment or business closure, credit cards may seem like an attractive option to meet your basic expenses. While they can help you bridge the gap temporarily, they’re not a long-term solution. You may find it difficult to pay off credit card debt even when you find a new job.

Credit Card Minimum Payments Can Be Misleading

Despite your intentions to keep up with credit card balances, you may find yourself making only minimum payments. You may have unexpected expenses or other pressing issues to deal with. You may find your balance will rapidly grow if you keep making minimum payments.

Why You Should Get Out of Credit Card Debt as Soon as Possible

Getting out of credit card debt should be a priority because credit cards carry high interest. The average interest rate on credit cards these days is 27.92%. If you have outstanding balances, they’ll continue to grow rapidly as interest charges are added to your account.

Unless you pay off your full balance each month, your debt will continue to snowball. If you pay only the minimum balance due each month, you’ll end up paying much more in total due to the high interest rate. 

If you get into a credit card debt cycle, the bank will charge you late fees. Worse, if your credit card is maxed out or over the limit, it’ll lower your credit score, and the high payments may make it nearly impossible to pay off debt. At this point, it will also take you much longer to pay off this debt. 

This is especially true if you:

  • Make impulsive purchases
  • Have multiple credit cards
  • Exceed your credit limit
  • Miss monthly payments
  • Pay the minimum balance each month

Each of these negative habits will make an impact on your credit and can eventually result in credit card delinquency. Getting out of high-interest credit card debt will take a huge burden off your shoulders and allow you to start saving for your future.

Getting Out of Credit Card Debt Is Difficult, but Possible

Getting out of credit card debt is challenging but achievable with the right strategies. If you have a clear plan and are committed, it is possible to achieve a debt-free life.

TurboDebt can help you achieve your financial goals through counseling, consultation, and planning services. Our debt professionals can help you find the right debt relief option based on your financial situation. Connect with us today for a free consultation.

Read our reviews to see how our debt relief services have helped thousands of clients.