10 Steps to Paying Off Credit Card Debt

There are plenty of scenarios that could lead you to rack up credit card debt. Maybe you got stuck with a series of unplanned bills. Maybe you encountered a medical issue. Or maybe you just lost track of your spending. Hey, it happens to the best of us. But if you're sitting on debt, it's important that you make an effort to pay it off as quickly as possible. Here's how.

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The idea of having debt can be overwhelming, so first things first -- figure out how much debt you actually have. Add up your credit card balances to see the big picture. From there, you'll be able to formulate a plan.

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You may have a credit card that charges a lot more interest than another. That would be a good card to tackle first. Order your balances from most to least expensive interest rate so you know how to prioritize them.

If you have a good credit score, you may qualify for a balance transfer, which will allow you to move your different credit card balances onto a new card with a lower interest rate. You may even qualify for a 0% introductory rate for a limited period of time.

Just as you can consolidate credit card debt with a balance transfer, so too is a personal loan a good way to consolidate your debt and make it easier to manage. Just as importantly, you might lower the interest rate on your debt substantially with a personal loan, making it less expensive to pay off.

ALSO READ: Step-by-Step Guide to Getting a Debt Consolidation Loan

If you own a home you have equity in, you may be able to do a cash-out refinance, which will allow you to borrow more than your remaining mortgage balance and use your extra cash to pay off your credit cards. Of course, you'll then have a larger mortgage to pay off, but if you manage to snag a low interest rate on your refinance, it may be much cheaper than paying off those cards one by one.

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If you can't qualify for a balance transfer, personal loan, or cash-out refinance, call your credit card issuers and see if they're willing to lower the interest rate on your debt. If you've been making your minimum payments on time and have held your accounts for many years, they may be willing to work with you.

To pay off your credit cards, you'll need to avoid spending your entire paycheck. And a good way to make that happen is to set up a budget. That way, you'll see where your money is going and you'll be able to carve out more cash for debt payoff purposes.

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Chances are, there are some things you pay for every month that you can technically do without. Go through your budget and cut back on a few expenses, like restaurant meals or streaming services, so you can free up more money to chip away at your balances.

Boosting your income is a good way to get out of debt sooner. Find something you can do on top of your main job, whether it's driving for a ride-hailing service or taking weekend shifts at a local store. Incidentally, you can use your earnings to not only chip away at debt but boost your retirement plan contributions, too.

You may be in line for different windfalls during the year. For example, right now, eligible parents are getting monthly payments for the newly expanded child tax credit. You can use that extra money to get out of debt sooner.

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The longer you carry debt, the more it'll impede your financial goals. Paying credit card interest will leave you with less money to fund your retirement plan, buy stocks, or purchase a home, so do your best to get out of debt as soon as you can -- and stay out of debt for good.

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