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It’s difficult to know how to pay off credit card debt, especially when you don’t have a lot of spare cash every month. But tackling a big balance isn’t necessarily an insurmountable task. All you need is a good  payment plan and persistence, and you can break out of the cycle of spiraling credit card debt.

Review your debt

Paying off your credit card debt begins with reviewing what you owe. In addition to knowing your balance on each card, check the interest rates and terms of each, and decide which cards to pay off first.

Some card companies might lower your interest rate or extend you more credit based on factors such as how long you’ve been with the company, your payment history and your credit score.

Review your credit reports

One way to pay off credit card debt is to use other forms of credit, such as low-interest or interest-free balance transfers to reduce the interest you’re paying. The better your creditworthiness and higher your credit score, the lower the interest rate you’ll get.

So, you should make sure there is no incorrect information on your credit report that can damage your creditworthiness.

Go to to get your free credit report. In addition, you can get one free report from the three credit reporting agencies — TransUnion, Experian and Equifax — once a year.

Decide which cards to pay off first

After you’ve reviewed your credit card debt, checked your credit reports and talked to your credit card companies, decide which cards you should pay off first. If you pay off the card with the highest interest rate, you’ll lower the total amount you owe over the long-term.

You also could try the “snowball” method, paying off the card with the lowest balance first to give you a psychological win. This could lead to paying more in interest over the long-term if the card with the smallest amount of debt also has the lowest interest rate. To avoid that, you could pay off the highest-interest card first.

Create a budget

Spending less helps you save money, which can be used to pay down credit card debt. To accomplish this, create a monthly budget.

Get copies of credit card and checking account statements for the past year to see where you’ve been spending your money.

For example, a couple that goes to the movies once each month at $40 per date spends more than $500 per year if they put those tickets, drinks and popcorn on a credit card and carry the balance.

It may sound like a stretch, but cutting one cup of coffee and one casual dining lunch per week can save you another $800 or more.

And, buying generics and waiting for grocery sales can help you save another $1,400 each year.

Now switch to the selling side of things. Go through your garage, basement and closets, and look for items you can sell in a yard sale or on Craigslist to bring in some extra cash to put toward your credit cards.

Manage your credit

Don’t close credit cards as you pay them off. Closing credit cards you’ve paid off can lower your credit score. If you close a credit card, you have a higher percentage of debt in relationship to your remaining available credit, which can hurt your score.

Consider adding a credit card if it gives you an opportunity to transfer a balance for a year or more at little or no interest. But be careful when applying for credit cards. New credit cards can lower your credit score, especially if you make a big charge immediately.


It can be daunting to pay off credit card debt, but if you follow the formula above, you’ll be successful.

First, you have to gauge how much debt you have and find a way to bring in a little more cash or spend a little less each month.

Then, take that money and put it toward paying off one credit card at a time.





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