5 Ways to Pay Off Credit Card Debt

ways to pay off credit card debt

Every year, consumers make the decision to use their credit cards during the holiday season. Unfortunately, this can cause some people to deal with much higher than usual credit card bills in January and February. Additionally, tax season is just around the corner, and this can make it even more difficult to deal with credit card debt without having it drag out for the next year.

Therefore, consumers need to look for ways to pay off their credit card debt as quickly as possible, and they should also consider consulting with a tax relief company if their IRS bill ends up exacerbating the issue. Dealing with the high interest rates and overall balances on credit cards present enough financial stress by itself, so alleviating tax debt with the help that tax relief companies can provide is an important and wise choice when considering a person's overall debt.

The following tips are options that a person can implement to help them work on eliminating any credit card debt that they may be financially faced with.

1. Always Pay More than the Minimum

Even if you are unable to pay your full balance every month, you should always pay as much as possible above the minimum amount due. After all, this can have a dramatic impact on the total amount of interest that you are responsible for, and it will become much easier for you to pay off your balance in a timely manner.

2. Focus on the Higher Interest Rates

Although you need to make a payment to each credit card every month, it makes the most sense to focus your attention on paying the largest amount to the card that has the highest interest rate. Again, this will let you reduce the amount of interest that you end up paying, and this is one of the most important aspects of getting your debt under control.

3. Reduce Your Unnecessary Spending

Instead of struggling to pay off credit card debt for several months, you should remove anything from your current lifestyle that is not absolutely essential until your bills are paid off. For example, you can get rid of cable and stop going out to eat so that you will have more money available each month to apply toward your debt. As an added bonus, this also gives you the opportunity to eat healthier and develop alternative hobbies to watching TV.

4. Use Cash as Your Choice of Payment

Psychologists have proven that people are more likely to spend a higher amount of money when they shop with a credit or debit card instead of cash. Therefore, you should limit yourself to using cash while you are in the process of paying off your holiday debt. This approach will prevent you from making the situation worse, and it will also help you learn to live within your means.

5. Contact Your Credit Card Providers

If you have accrued more debt than you can pay off during the next year, you should definitely contact each credit card company to inquire about whether or not they are willing to reduce your interest rate so that you can pay everything off more quickly. If you are up front with each company and have a good payment history with them, the odds are high that they will work with you.

Ultimately, it is important to create a budget that will prevent you from racking up too much debt in the future. However, your immediate goal should be to utilize each applicable tip and create a plan so that you can pay off your credit cards before the holiday season gets here again. Included in this plan should be utilizing tax relief companies for any tax debt accumulated that may interfere with your goal of getting out of credit card debt.


    • Apollo

      Apollo 01/06/2014 7:51 a.m. #

      Paying more than a minimum is a must as you will never pay off your debt if you stick to minimum payments.

    • Ryan Biddulph

      Ryan Biddulph 01/06/2014 9:29 a.m. #

      Hi Sicorra,

      Smart tips! 4 is huge. After a terrible credit/financial past - hey I went for it all lol ;) - I need to now apply for credits cards to develop some credit history, as I have paid for everything in cash over the past 3 years.

      Super discipline, for sure, but I do need to build my credit up a bit now.

      Thanks for sharing!

      • Sicorra

        Sicorra 01/06/2014 3:02 p.m. #

        Congrats on sorting things out and being able to pay cash for everything for 3 years. That isn't always easy.

        And yes, rebuilding your credit is important to as you never know when you might need a good score. I'm sure you will do well.

    • Shannon @ The Heavy Purse

      Shannon @ The Heavy Purse 01/06/2014 10:56 a.m. #

      Great tips, Sicorra! It's so easy to get swept in the holidays and lose track of how much you spend. It's a good time to take stock of our debt and take a closer look at how we're spending money. Many people aren't even aware how much debt they have and how much of their income goes to pay off debt. It can be very eye-opening and good motivation to get out of debt, once and for all. Happy New Year!

      • Sicorra

        Sicorra 01/06/2014 3:05 p.m. #

        Yes, I agree, it is very easy to lose sight of how much you are spending on gifts and such for the holidays.

        And how much debt a person has usually is a mystery as we dread seeing the total amount. It does feel really good though to get things sorted out and under control when it comes to our debt.

    • Corinne

      Corinne 01/06/2014 6:44 p.m. #

      Great tips! We managed to pay off our debt a few years ago by budgeting, using any extra toward just one card, and getting that one paid off as quickly as possible. We just kept going til we were debt-free and let me tell you, it was the smartest thing we've ever done.

      Hope you have a great week Sicorra!

      • Sicorra

        Sicorra 01/07/2014 7:16 p.m. #

        Congratulations Corinne! I know it isn't easy but you must have felt wonderful once you guys were done.

        Have a great week as well!

    • Arelis Cintron

      Arelis Cintron 01/07/2014 1:01 p.m. #

      I just balanced my checkbook last night and paid my credit cards. I did not want to look at my amex card as I had purchased some holiday gifts and have been using it to pay for groceries and gas. Worst mistake ever. I will go back to #4. Using cash or my checking account directly to pay for food, gas and other things of necessity. I hope to pay it off soon.

      • Sicorra

        Sicorra 01/07/2014 7:18 p.m. #

        It isn't easy, is it Arelis? We get caught in the same trap. Good for you though for getting your stuff paid up and for working on going back to a cash only system. Best of luck!

    • Lisa E. @ Lisa Vs. the Loans

      Lisa E. @ Lisa Vs. the Loans 01/09/2014 11:50 a.m. #

      Paying more than the minimum is a great habit to get into, even if it's just $5 over!

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