Sam is a single parent with two small children. Living paycheck to paycheck, Sam feels the weight of every bill. At first, credit cards were a safety net. But after some car repairs and medical bills, the debt piled up. Groceries, daycare, birthday gifts, debt, debt, debt. The cards are maxed out, and what felt safe is now a trap. Sam is mentally exhausted, embarrassed and can’t see a way out of the cycle.

Your circumstances may not be the same as Sam’s. But if you have credit card debt, you may feel the same exhaustion and anxiety. You’re not alone. A Bankrate survey found that almost half of credit cardholders carried card debt from one month to the next in 2023.

The simple fact is credit card companies make money from your debt interest. But there are things you can do to start taking back control of your finances.

Find your footing

No matter where you are with your debt, a few safe and simple steps may help you start on your way out. Give one a try. You may even benefit from all three.

Pay automatically. Setting up automatic payments makes the system work for you. With little effort, you start a habit that helps you pay off debt and avoid costly late fees. If you’re not used to automatic payments, start with the minimum and work up from there.

Pay lower interest rates. Talk to your creditors about getting a lower interest rate. Paying less in interest can help you get out of debt faster.

Pay more. Credit card companies decide what the minimum payment is. And they set it low. They don’t do it to help you but to get you to pay more interest for longer. But every dollar you pay over the minimum will save you money in the long run. Decide for yourself what to pay monthly.

Pay off high-interest debt first. Your worst debt isn’t necessarily the biggest one. It’s the one with the highest interest rate because it costs more money to pay off. So, each month, pay more than the minimum on the higher-interest debt and pay the minimum on the others. Once the worst debt is paid off, apply that monthly payment to the second-worst debt, and so on.

Take those extra steps

When you’re ready, or if your debt needs more of a push, consider these more in-depth options.

Use a budget to free up money. A budget is a tool you tailor for your own life. Use it to see where your money is going and decide where you might save money. For example, try limiting your streaming service spending or getting take-out less often. Decide on a plan that works for you. Apply the money you free up to pay off your credit card debt.

Apply for a debt consolidation loan. Consolidating your debt means putting multiple debts into one. The key is to gather them into something with a lower interest rate than your current debt. Many personal loans, like a fixed-rate debt consolidation loan, tend to have lower interest rates than credit cards. Use the money you save to pay down your debt faster.

Apply for a balance transfer credit card. Some transfer cards let you pay a starting interest rate of 0% for the first year or so. Transferring your other debts to this card lets you pay money directly to your principal debt instead of to the interest. But be careful. If you can’t pay off the debt within the set amount of time, make sure the new interest rate isn’t higher than your current one.

The bottom line

No matter what caused your credit card debt, remember these two things as you take steps toward your peace of mind:

Pay more than the monthly minimum
Try to get lower interest rates

Paying off credit card debt may not be easy, but these two concepts can give you a place to start. The more in-depth strategies are all connected to them, too.

If you struggle to pay the monthly minimum or just want a trained professional on your side, a credit counseling agency may be able to help. Reputable credit counselors will discuss your financial situation with you. They may help you personalize a budget, create a debt management plan or negotiate with your creditors. The Federal Trade Commission offers resources for finding a credit counselor who’ll work with you to find a way forward out of debt.

Sources:

Credit Karma. How to get out of credit card debt. Nov. 2022.

Greenberg AE, Mogilner C. Consumer debt and satisfaction in life. Journal of Experimental Psychology: Applied, 27(1), 57–68. 2021.

Pyles S, Curtis T. How to get out of credit card debt in 5 steps. Nerdwallet. Nov. 2023.

Thangavelu, P. Survey: More cardholders carrying balances, credit card debt. Bankrate. Jan. 2024.

U.S Securities and Exchange Commission. Investor.gov. Pay off credit cards or high interest debt. Accessed Jan. 2024.

Start recovering from credit card debt

More about Financial