Five Effective Options for Ridding Yourself of Credit Card Debt

credit card debt, dealing with debt, debt management

According to, the average household has about $15,000 worth of credit card debt. If you’ve found yourself in this category, the best thing you can do for yourself is to start chipping away at that balance. Putting the debt off only leads to more debt as interest rates and late fees will accrue causing the balance to double over time. Contrary to popular belief, there is no one surefire way to get rid of all of your debt, nor is there an instant solution to your credit card issues. However, by creating a plan and weighing your options, you can get yourself out of debt a lot easier than you may have imagined. Below are the top five ways this can occur.

1. Paying Down Least to Greatest

Experts such as Dave Ramsey suggest paying down your credit card debt from the smallest balances to the greatest balances without any consideration for the interest rates. It is believed that when you experience the satisfaction of paying off a debt, you’re motivated to continue paying off the rest of your balances. Take a look over your credit card balances and place them in order from least to greatest. Adjust your budget accordingly and begin putting as much as you can towards the smallest balance. Once that balance has been paid in full, you can move on to the next balance and so on.

2. Paying Down High Interest Rates

The cards that have the higher interest rates and higher credit utilization rates (the amount used verses the amount of credit) are likely doing the most damage. In fact, according to, your credit utilization rate accounts for approximately 30% of your credit score. It is best to try and keep your credit utilization percentage down to at least 30% to improve your credit score. As such, if you have high utilization rates, you should begin by paying those down.

3. Balance Transfers

Many consumers aren’t aware that they can transfer a balance from an old card onto a new credit card. If you were to get yourself a credit card where you pay 0 interest, you could essentially save yourself a great deal of money as you pay down your debts. However, it is important to weigh all factors involved in balance transfer credit cards. You will want to assure that the interest rates (after the promotional period) are reasonable, and that the balance transfer fees don’t consume what would be your savings.

My family was in a considerable amount of credit card debt. While none of the balances were at their limits, they were close to it and the interest rates were making it hard to knock down the total amount owed. As such I applied for a credit card with balance transfer options. When reviewing the promotional period, I divided the amount I owed by the number of months the zero interest offer was for (in my case, six months). I then made sure that my budget would allow me to pay the balance down within those six months time. This helped me to stay on track and helped me to get rid of my high balance in less than a year’s time.

4. Increase Your Emergency Fund

Now this might not seem like an option for paying down your credit card debt, however, it has worked for several individuals in the past. Think about it…when a financial emergency rises, what’s the first thing you do to resolve it? Chances are you swipe a credit card to take care of the problem until you have the money to pay down the balance. This only puts you further into debt. Instead, building your emergency savings will allow you to have cash in hand the next time there is an emergency. This way, you don’t have to borrow the funds from a credit card provider. Essentially, you can continue paying down your credit card balances without the stress of emergencies setting you back.

5. Pay Down Debt with Your Savings

Lastly, if you’re in a vulnerable position where you’re facing lawsuits, wage garnishments, or a repossession of sorts, it may be beneficial to use some of your savings to pay down your debts. While it is advised to keep at least $1,000 for emergencies, any extra income can be put towards paying down your credit card balances. There are instances in which credit card companies will allow you to settle for a lump sum. If you have the means, this may also be an option worth looking into.

It’s true that debt is simply a part of life, but if it’s gotten to the point that you’re overwhelmed with the stress of credit card debt, it’s time to do something about it. Allowing the issue to spiral out of control only makes matters worse in the end. The above five options are all effective solutions in helping you get your debt down to a minimum. In closing, remember, having the right attitude is also very important to becoming and staying debt free.

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Clever Dude

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