Say Goodbye to Your Credit Card Debt With These 4 Tips

Credit card debt doesn't need to be something you live with year after year.

It's never a good time to have credit card debt, but if you're currently carrying around any balances, paying them off is more important than ever. With interest rates rising, credit card debt may get more expensive in the near future.

Getting out of credit card debt isn't easy. I've dealt with it before, so I understand how stressful and challenging it can be. But there are some tips you can follow to at least make it easier. They can help you pay off your credit cards more quickly and save money on interest charges.

1. Limit your credit card usage

When you have credit card debt, the first thing you need to do is stop the bleeding. The solution might be to stop using your credit cards entirely and only pay with a debit card or cash. If you're going to keep paying with credit cards, only use them for the absolute essentials.

One of the reasons that credit card debt is so hard to pay off is that many people continue using their cards as normal. Even as they make payments, they also take a step backwards by adding new charges. To get out of credit card debt, you need to both pay it down on a regular basis and keep your spending to a minimum.

2. Commit to a monthly payment amount

For this tip, you'll need to know your take-home pay and your monthly fixed costs, meaning your necessities. Add up all the bills you have to pay, and then subtract them from your take-home pay. Based on what's left over, you can decide on how much you'll pay toward your credit card debt every month.

Let's say your take-home pay is $4,000 per month, and your fixed costs are $2,500. That leaves $1,500. Knowing that, you could commit to paying $750 or $1,000 per month toward your credit card debt. Leave yourself some wiggle room here. It's important to set a realistic goal you can reach every month.

What's important is committing to a specific amount. By doing this, you're more likely to stay on track and be consistent.

3. Apply for a balance transfer card or debt consolidation loan

These are both popular ways to pay off credit card debt. Here's how they work:

• Balance transfer credit cards offer a 0% intro APR on balance transfers. The intro APR can last for 12 months, 18 months, or longer, depending on the card. If you get a balance transfer card, you can transfer over your credit card balances and avoid further interest charges for the length of the intro period.
• Debt consolidation loans are personal loans intended for paying off debt. If you get one, you can use it to pay off all your credit cards. Then, you can pay off the loan in fixed installments.

With both options, you can get a lower interest rate on your debt, saving you money. They also consolidate your debt so you only need to make a monthly payment on one account (your balance transfer card or loan).

To qualify for either one and get the lowest rates, you'll most likely need a good credit score. You can still try applying if your credit isn't quite there yet. However, it may be better to hold off, work on paying down some of your debt first, and then apply after you increase your credit score.

4. Decide on a payment plan

You've already decided on a payment amount, but your payment plan is a bit different. This is how you'll distribute that monthly payment among your credit cards.

Now, if you opened a balance transfer card or a debt consolidation loan, this is easy. Since you only have one account to pay, you can just put your entire monthly payment on that account. But if you didn't and you have multiple credit cards, then a payment plan is needed.

There are two common payment methods, known as the debt snowball and debt avalanche, that you could use:

• Debt snowball: Make minimum payments on all your credit cards, and put all your extra money on the credit card with the smallest balance. Once you've paid off that credit card, repeat the process for the credit card with the next smallest balance.
• Debt avalanche: Make minimum payments on all your credit cards, and put all your extra money on the credit card with the highest APR. Once you've paid off that credit card, repeat the process for the credit card with the next highest APR.

The debt snowball is great for staying motivated, because it cuts down your number of debts most quickly. The debt avalanche saves you the most money in credit card interest, since you target debts with the highest APR first.

Credit card debt may seem overwhelming. But if you're careful about your spending, you come up with a plan, and you're consistent, you could have your debt paid off sooner than you think.