Want to Pay Off Credit Card Debt in 2024? Don't Wait Until January to Do This

With 2024 just a few weeks away, you probably already have a New Year's resolution in mind. Paying off debt is the most common financial goal, according to The Ascent's recent survey, and for many, this includes credit card balances.

It's a worthwhile goal because eliminating debt can improve your credit and reduce your stress. But if you want to hit the ground running in January, it helps to lay some groundwork now. Here are two steps I recommend.

Come up with a strategy

There are a few ways to eliminate credit card debt. The debt avalanche method is a good choice for those with extra cash each month. This is where you pay the minimum balance on each card every month and then put any remaining cash on the card with the highest interest rate first. When that's paid off, you move onto the card with the next-highest interest rate and so on until you're debt free.

This method can still be difficult, though, because your balances continue to accrue interest while you're paying them off. If you don't want this to happen, consider a balance transfer card or a personal loan.

Balance transfer cards are credit cards that offer a 0% introductory annual percentage rate (APR) for a number of months before interest charges kick in. If you're able to pay off your debt during this time, you may not pay any interest at all. However, there are fees associated with balance transfers, and any balance remaining after the 0% APR period is up will begin accruing interest at the standard rate.

Personal loans give you a predictable monthly payment so you don't have to worry about ballooning interest charges. However, interest rates on these loans tend to be above-average since there's no collateral.

You could also choose a combination of the above strategies. For example, maybe you only take out a loan for some of your credit card balance and use the debt avalanche method to pay off the rest.

Start comparing your options

If you plan to take out a personal loan or open a balance transfer card, compare your options now so you can dive right into paying off your debt in 2024. Make sure you look at a few cards or loan providers before making a decision.

When choosing a balance transfer card, keep in mind that you can't transfer a balance to a new card with an issuer you already owe. You'll have to choose a different issuer to work with. For example, if you have a balance racked up on a Chase card, you'll have to look at issuers outside of Chase to open a new card and transfer your Chase balances to. You should also investigate the balance transfer fees the card charges so you have an idea of how much your total balance will be on the new card.

Pay attention to the card's standard APR as well, especially if you don't think you'll be able to pay off the full balance before the 0% APR period ends. Make sure you're comfortable with this rate or develop a back-up plan for how you'll get rid of any remaining debt.

If you're thinking about taking out a personal loan, you'll need to decide which provider to work with. Many have tools on their websites to help estimate your interest rate. But you must apply to get an accurate offer. Keep in mind that these loans have closing costs and interest charges. And choose your loan term carefully. A longer loan term means a smaller monthly payment, but you'll also pay more in interest overall.

Once you've found the card or loan provider you want to work with, begin your application. It can take some time to complete this, especially around the holidays. By starting now, you'll hopefully have everything sorted out by early January at the latest. Then, you can get right on making payments toward your debt and watching it melt away quickly throughout 2024.