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By Martha C. White
July 16, 2021
Illustration of a credit card with the word  Debt  written on it, partially erased
Money; Getty Images

This is a great time to get out of credit card debt.

The economy is starting to work its way back to normalcy following the COVID-19 pandemic, and the average American’s personal savings rate has jumped to record levels.

Still, many people are stuck with high-interest credit card debt — a burden that will only worsen when the Federal Reserve increases interest rates as early as next year.

In other words, the time to get to work whittling down that debt is now — especially if you were able to save money over the course of the pandemic.

Here are six smart strategies to help you out.

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1. Make an extra monthly payment

You’re probably in the habit of monthly billing cycles, but you don’t have to wait until your payment due date to pay down some of your balance, and you aren’t limited to making just one payment each month.

Credit card interest is compounded daily, and the finance charges you accrue are based on your account’s average daily balance. That means that every day you wait to make a payment, you’ll have to pay more in interest charges.

If you get paid every two weeks or bimonthly, making two payments a month might be feasible; if you’re paid more often — say, you get a weekly paycheck or you’re a tipped worker — you might want to consider jump-starting your debt-management plan by paying weekly.

Another advantage to making more than one monthly payment is if you use that money to pay down your credit card balance as soon as you earn it, you won’t have the chance to change your mind later and splurge on something else with those funds.

Just make sure that the total amount of money you pay by the due date on your credit card statement is at least as much as your minimum payment, because late fees and penalty rates still apply if you fail to do so.

Here’s another hot tip: Lowering your debt quickly can also improve your credit score by lowering your credit utilization, which can make it easier to qualify for a balance transfer credit card (read on for more information on how to do that).

2. Get a balance transfer credit card

If you have a high credit score, you might be eligible for a card that can help you pay down your outstanding balance sooner.

Balance transfer credit cards offer 0% introductory APR rates for a promotional period — this varies, but 12 to 18 months is the norm. This intro period gives you a window of opportunity to pay down your debt quickly: Since you’re not paying interest, your entire monthly payment goes straight towards paying down the principal. Make it a priority to pay down your balance before the promotional period ends, though — especially if the non-introductory APR rate is on the high side.

A caveat: A balance transfer credit card that also offers 0% APR on purchases might seem like a nice perk, but it’s important to focus on your top priority (paying off your credit card debt).

Also, know that many balance transfer cards charge a balance transfer fee of at least 3% of the balance you’re transferring — an amount that can add up if you have a large amount of debt. Look for cards that have low — or no — balance transfer fees, and more of your money can go towards servicing your debt. (For more information, read: The Best 0% APR Credit Cards Available Right Now.)

3. Map out a repayment plan with a “debt avalanche” or “debt snowball”

There are two main schools of thought when it comes to credit card debt repayment.

The first, the “debt avalanche” method, focuses on paying off your cards with the highest interest rates first, and then, once those are paid off, moving to those with the lowest interest rates. This approach makes the most mathematical sense, since you’re shortening the amount of time you’re paying off the credit cards that are charging you the most money.

The other tactic is the “debt snowball” method. This is specifically for people who struggle to stick to a debt reduction plan when there seems to be no end in sight.

Popularized by personal finance expert Dave Ramsey, the “debt snowball” focuses on paying off your smallest debts first, then your next-smallest balance, and so on. According to some behavioral economists, eliminating small debts early on in the paydown process can be a worthwhile mental reward that helps some people stay motivated to stick with it.

This isn’t quite as cost-effective as paying off the high-interest debt first, but if it gives you the motivation to buckle down and pay off your debts, it might be the preferred route.

4. Take out a personal loan

If you don’t have excellent credit, applying for a personal loan and paying off your credit card debt in full might be your best option. You can search for a lender online or check with a local bank or credit union to see if they offer personal loans (they might also be called debt consolidation loans). You’ll still be paying interest, but likely at a lower rate, since APRs for personal loans are often several percentage points lower than credit card APRs. You’ll also only have to make one debt payment every month instead of having multiple credit card accounts and due dates to keep track of.

5. Reduce spending by tightening your budget.

Nobody likes to hear this, but one of the easiest ways to quickly pay off debt is to throw more money at it every month.This means finding new ways to save, like canceling your cable TV or reducing the number of nights you order takeout. Anytime you can make more than the minimum payment on your credit card bills, you’re one step closer to being debt-free.

6. Contact a credit counseling service for professional help.

If you’ve already tried the tactics on this list and are still struggling to get your credit card debt under control, it might be time to call in the pros. Nonprofit credit counseling services will look at your credit card debts in the context of your other financial obligations, like a home equity loan or line of credit, car payment or student loans, and work with you to create a repayment plan. Some even negotiate with credit card companies to get you a lower interest rate and offer financial literacy education that can keep you from falling back into the debt trap in the future.

If your financial situation is especially dire, and you’re contemplating bankruptcy, it’s already a requirement to undergo credit counseling before pulling the trigger. Taking this step on your own could lead to the realization that you can conquer your debt with a payoff plan, and not bankruptcy, after all.

Bottom Line: How to Pay Down Credit Card Debt

With the labor market improving, wages rising and bigger emergency funds in many people’s bank accounts, the present moment could be a great opportunity for you to pay off all your lingering debts — or at least to start paying down your balances.

It might not be quick or easy, but many people who succeed at sticking to a debt management plan say the feeling of relief once they become debt-free is worth the effort.

If you have a lot of credit card debt, there’s no time like the present to work on getting rid of it.