Your Quick & Easy Guide To Paying Down Credit Card Debt

Illustrated by Isabel Castillo Guijarro.
You took our quiz, and you’re finally ready to admit that you have a bad habit of giving into peer pressure. If your friends are spending the weekend in Miami drinking frosé, you’re always game, regardless of the balance in your bank account. While you’re taking strides to break the vicious cycle and actually live within your means, now you want to take even more drastic steps to tackle your credit card debt once and for all.
First off, don’t be ashamed.
The words “credit card debt” can have some shame and stigma associated with them, but in reality, it’s super-common. According to Value Penguin, the average credit card debt for adults under 35 is $5,808.
Figure out what your debt is really costing you.
Many credit cards have super-high interest rates (that’s how credit card companies make money, after all). In fact, for every $5,000 you carry in credit card debt, you’re likely paying an additional $1,000 per year in interest. If you’ve been carrying your balance for five years, you’ve essentially poured an additional $5,000 down the drain. Lay out your debt and calculate what the interest rates are costing you. What else could you be spending that money on?
Come up with an aggressive payment plan.
The best way to start is to automate. Set up a repeating transfer where 20% of your paycheck (based on the amount that hits your bank account, not the pre-tax number) is automatically used to pay down your credit card.
If you are eligible, transfer your credit card balance onto a card that’s offering a 0% interest rate. This will eliminate the interest building up and help you pay off the debt faster. Shop around or hop on the phone and talk with an actual human to find the best card for your needs. It's important to note that there can sometimes be fees attached to transferring balances, and often times the 0% interest is for a very limited time before the rates can sky-rocket. Make sure you can commit to paying off the balance during that time period. And don't make balance transfers too often, as it can impact your credit score.
Once you get into the groove, this whole thing will be way easier than you thought. If you make $70,000 annually, you should be putting around $875 per month toward your credit card debt — which means you could pay off a $5,000 balance in as little as six months.
Visualize the future.
Keeping up your current lifestyle is expensive, and it's only going to cost more in the future. Visualize your future self and prioritize setting yourself up for success. Sure, it’s easy to argue YOLO and just plop down money for a ticket to Portugal even when you don’t have the cash to pay for it. But think about where you want to be three years from now, or five years from now, or 10 years from now. Write down concrete goals and create a vision board. Could you achieve these goals with credit card debt hanging over you? What would you need to change today to make this happen? Is the goal important enough to you to make this change?
Keep your plan sustainable.
Be aggressive, but don’t make a plan that you can’t stick to. Consider what’s important to you and find a compromise. If you love going out to dinner with friends, think about hosting a potluck or doing one really special dinner every other month. If you hate having chipped nails, teach yourself how to do a killer at-home manicure and treat yourself to a new polish every now and then. It’s amazing how much you can change when you keep your ultimate goal in mind.
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