What is the Best Way to Pay Off Credit Card Debt?

Weighed Down by Credit Card Debt? 3 Ways to Pay It Off

If you’re like most Americans, you have a high amount of credit card debt. According to government statistics, we owe a collective $900 billion to credit card companies. That’s on top of what we owe in mortgages, student loan debt and medical debt. So, What is the Best Way to Pay Off Credit Card Debt? If you’re ready to get a grip on your long-term financial goals, here’s how to start your own credit card debt payoff plan.

Pay Off Credit Card and Other Debt to Free Yourself

If you’re contemplating a career change, major life change or a new business venture, it’s best to start with a clean slate. That means getting rid of all debt that’s weighing you down.

Are You Living Paycheck to Paycheck?

It can be hard to think about getting out of debt when you’re not making much money. When you live paycheck to paycheck, it seems ridiculous to start thinking about how you’re going to pay down credit card debt. But, don’t give in to those gloomy fears! There are ways to fit a payoff plan into any budget.

The first thing to do is:

  • Sit down
  • Go through your bills
  • Do a total, honest assessment of everything you owe.

I know it sounds like a real pain, but make yourself a snack, find a quiet place, and make it happen. After that, try one or all of these tips to start hacking away at that debt.

3 Tips to Pay Down Credit Card Debt

Here are some time-tested techniques to make a dent in your debt. The most important thing is to just get started.
Best Way to Pay Off Credit Card Debt

1. Use the Debt Snowball

The debt snowball is a technique popularized by personal finance guru Dave Ramsey. Unlike most experts who recommend tackling the highest interest debts first, Ramsey suggests tackling the smallest debts first because you’ll get a jolt of satisfaction that will motivate you to keep going. In Ramsey’s view, the emotional high you’ll get from paying it off will motivate you to finish paying the others.

Here is Ramsey’s 8-point description of how to do the debt snowball:

  1. List your credit card debt from smallest to largest payoff balance. Don’t worry about interest rates
  2. Make minimum payments on all credit cards except the smallest. Attack the smallest card with everything you have.
  3. Pay off the smallest credit card.
  4. Close the account and dance around your living room. Party music is optional.
  5. Take the money you were paying on the smallest credit card and roll it into paying off the next smallest balance.
  6. Pay off that second credit card.
  7. Close the account. Dance and cheer around your living room. You’re beginning to take control of your money. Turn the club music up loud this time because your neighbors need to know what you’re doing so they can pay off their cards too.
  8. Repeat this method until you pay off the very last credit card.

Ramsey is a popular figure in the personal finance market. He has a website, training seminars, live events, books, a radio show and other resources that are all aimed at helping people pay down credit card debt and get financially healthy. Many of them are free.

Ramsey is somewhat controversial. Some critics dislike his insistence that nobody needs a credit card, his reliance on Biblical tenets and his politically conservative views.

On the other hand, millions of people have found “financial peace” after following his advice. If you’re looking for a no-nonsense approach to credit card debt payoff, you might find Ramsey’s resources work well for you.

Best Way to Pay Off Credit Card Debt

2. Use the ‘You Pick’ Payoff Plan

The financial planning site NerdWallet regularly posts tips for saving money and handling your finances. Among the site’s free resources is an incredibly handy Debt Strategy Tool that helps you pick the payoff plan that’s best for you. You just enter the amount and type of debt you have.

The tool lets you choose from these payoff plans:

  • The debt snowball: This is the Dave Ramsey method we described above. It focuses on changing your mindset and behavior.
  • Debt avalanche: In this plan, you pay off your highest-interest debts first and pay only the minimums on the others. This plan helps you avoid being saddled with high interest rates for years.
  • Debt consolidation: This is often the easiest way for people to tackle debt. Consolidate everything onto one credit card or loan and make payments on it. According to an article in US News and World Report, a debt consolidation loan is an excellent way to handle overwhelming credit card debt because you only make one payment and you know exactly when you’ll be debt-free. You need good credit and the ability to get a low-interest loan to make this strategy work.
  • Credit counseling: If you feel overwhelmed by your ability to handle your debt, this can be a good way to get help. You should be careful, however, as there are a lot of scammers operating as “credit counseling services.” Some financial planners say you’re better off just declaring bankruptcy.

3. Make More Money

This seems obvious, but hear me out. There are some basic steps you can take to get a grip on your finances immediately. In the long term, your focus should be on increasing your income through a side business, new career or passive income.

Here are some steps you can take right away as part of your credit card debt payoff plan:

  • Before you make a big purchase, take a part-time second job to earn money for it.
  • Switch to paying for cash whenever possible. Handing over stacks of your hard-earned cash is more immediate than swiping a credit card. Doing this will make you think twice before you make any purchase.
  • If you can’t resist using credit cards, don’t get any. Only pay for what you can afford.
  • Instead of relying on credit cards, build an emergency fund in your bank account.

Do you have long-term plans for your money? Once you get through an immediate cash crunch, here are the best ways to increase your income.

Switch careers

If you’re convinced you’ll never make enough money in your current position to get out of debt, it’s time to seriously consider a career change. This decision leads to another set of problems.

  • Do you have the skills to make a switch?
  • Can you afford to get additional training for a new career?
  • Will you have to start out at the bottom in your new career?

These are legitimate questions you need to consider before you make the leap.

Get a well-paying side job

There are some side hustles that pay well, but aren’t you tired of spending all your spare time working? If you can find one of these gigs, it’s a great way to increase your finances and help you pay off debt, but it should only be a temporary measure.

Gain passive income

Would you like a money source that works for you around the clock and delivers a reliable, steady stream of income? If you set up a passive income source, you’ll have all the benefits of a well-paying side job without having to actually work at one. Best of all, you’re in control of how much passive income you can make.

Best Way to Pay Off Credit Card Debt

Where’s the Best Place to Start?

I’m glad you asked!

Why not start building a brighter future by building something of your own?

  • Something that will let you choose exactly how and where you want to work.
  • Something that you can build from the comfort or your own home, or anywhere else you and your family decide to be.
  • Something that doesn’t require you to work for someone else.

Starting your own online business will allow you to chart your own future without the need to pin your hopes and income on other people’s goals or policies that can change over night.

You’ll create your business on your own terms, focusing on your own special interests, skills, and talents.

Did you know Americans spent over $365 million dollars on online purchases in 2019? We’re expected to spend well over $400 million this year. World-wide online sales for 2019 reached $3.46 trillion.

This is a growing industry, and will continue to be for many years to come.

Check out my #1 recommendation for building an online business. They’ve been teaching people just like you how to make life-changing incomes for over 14 years, and it just keeps getting better. They provide:

  • Wonderful hosting
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Here’s a small sample of the over 100 things I’ve learned so far:

  • A fast, easy way to build a website.
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  • What keywords are and how to choose the best.
  • How to write posts people will want to read.
  • How to use social media to your best advantage.
  • Why being indexed by Google is important, and how to make it happen.
    Way to Pay Off Credit Card Debt

A Like-Minded Community

You’ll also find a community of like-minded individuals who understand your dream, and want to see you succeed. Many of us have friends and family who simply do not understand our desire to have our own business. They can feel confused, and this can cause you to feel like the lone ranger.

You are never alone in your journey. And, you’ll always have access to live mentoring and a superior site support department.

It’s up to you whether your site remains a side gig, or you grow it into a full-time endeavor.

It’s a great resource for learning how to promote yourself, your aspirations, and your special concerns, and is the place where I have learned everything you see on this website. You’ll find everything there you need to start your own business tailored to your unique interests!

You’ll be joining over one million helpful folks there, many of them current and former teachers, like me.

Best of all, you can check it out for yourself at no cost or obligation. Why wait any longer to turn that dream of yours into a reality?

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4 thoughts on “What is the Best Way to Pay Off Credit Card Debt?”

  1.  Interesting ideas here, and I suppose you just have to pick a strategy and try it and see which works best for you. To my mind, it makes sense to pay off your highest interest debts first.  But, I realise that can be a bit overwhelming for some people, especially if the debt is large. I suppose the thing to do is just start somewhere and keep at it until you’re free of debt.

    • I think you’ve just summarized the article perfectly.  You have to start somewhere and keep at it.  Knowing what motivates you is also an important piece of the process.  Getting rid of high interest accounts first does make good sense.  However, if you would do better with small successes along the way, paying of the smallest debts first can offer that boost.

      Thanks for joining the conversation; I appreciate it!

  2. Interest rates have been crushing me for about 4 years now.  Unfortunately, I have been unable to recover fully (Yet!) from what I racked up on credit cards while taking care of sick and dying friends.  

    I haven’t given up though and, although I have a high-revolving debt I have a spotless payment record so I’m slowly inching towards a solid 700 score again.  I’ve tried to consolidate to no avail.

    I used the snowball method and, it did give me the energy boost to move forward and not backward!  

    I’m not rolling in the cash yet, obviously, but, having my own online business has been the smartest decision I’ve ever made for myself!  Last year I was able to transition to working from home because of it and, that alone has been my goal for 10 years!  

    I totally agree with you about sitting down and, being honest with yourself about your situation.  It took a lot of the fear out of it for me while I was making a plan and setting new goals 🙂

    • I’m so happy you’ve been able to have such success with your online business.  I love it when goals become realities!  I’m also happy to hear that the snowball method worked for you.  I know it’s been a very effective tool in helping people reach a better financial future.  

      Thanks so much for joining the conversation; I appreciate it!


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