The Fast and Efficient Way of Getting out of Credit Card Debt

Credit Card Debt

With our increasing needs and wants comes our high utilization of credit cards leading to accumulation of debts. While some debt is inevitable, drowning in it is unnecessary. Taking a methodical approach is the most efficient way to manage and free yourself from debt. If you are determined to get out of financial servitude, here’s how:

Know and Assess Your Current Situation

Commit to paying down your debt and spending less than you earn. You can’t develop a plan if you do not know where you stand. To have a better grasp of the situation, run your life like a business. Get a handle of all your income and track where each penny goes. This way, you’ll be able to identify and cut back, if not totally eliminate all unnecessary expenses. Put your needs ahead of your wants to get more from your income. The extra money you save from unnecessary purchases can be used to pay down your debt.

Create a Budget and a Plan

Setting up a budget helps you control spending and set some money aside. The money you set aside can be used for paying down your credit card debt. Plan your move and target one debt at a time, especially if you carry multiple cards. You can focus on the card which has the highest interest rate. Say you have $1000 balance with 0% interest rate, and another with 25% interest rate with the same or even higher balance, pay off the latter because the interest rate will accumulate and add up to your balance and you will end up needing to pay more the next month. You can pay the minimum for your other balances with less interest rate. You can also opt to pay for which has the smallest balance but you must pay it off completely. Pay more than the minimum amount required of you so you have more going to your balance and less interest for the next month. If you pay only the minimum amount, then you are bound to do so for a long time. The finance charges and interest rate take up a fraction of the minimum payment so you end up paying for just a little of what your actual balance is.

Consolidate and Conquer

This is especially helpful if you have multiple cards with varying balances. Check if you can transfer your credit card balance to one low-interest card. This way, you are able to decrease the interest for all of your balances and focus on a single card when making payments. You may also opt to call your credit card company directly and request to lower your interest rate, there’s a chance they will honor your request especially if they suspect that you are about to transfer your balance to another card. Making multiple payments may also help decrease interest charges. Reducing your credit card finance charges can be done by dividing your monthly payment in two and making the payments every two weeks. Or if you have extra funds, you can multiply your monthly payment instead of dividing it.

Credit Card Consolidation

Make Wise Trade Offs

No matter how much debt you have, do not be tempted to increase your cash flow by sacrificing your retirement contributions. On a long enough time line the retirement savings you put up from your paycheck deductions, tax breaks and future investment gains would more than make up for even the highest credit card interest you have to pay now. You may also consider using your emergency fund. It sounds scary but it makes financial sense to use your low-interest savings to pay down your high-interest credit card debt. Not only are you able to free yourself from debt but you’re able to keep your emergency fund accessible through a bigger available credit. As long as you diligently pay down your credit card debt every month, you will always be able to use it should an emergency arise.

Now that you have all that figured out, you can start putting your money where your debt is. Until you’re done paying off your last credit card balance, all money you receive from overtime, allowances, tax refunds, freelance work, and even garage sales should be used to pay down your credit card balance. Staying away and getting out of credit card debt requires a lot of discipline and self control. With commitment and proper mindset, freeing yourself from credit card debt is not a daunting task.

Photo Attribution:

Featured and 1st image by Stuart Miles at

2nd image by Stoonn at