Kicking Credit Card Debt to the Curb

Eliminating debt is a key step on the path to financial freedom. Credit cards, with their high interest rates, can make it especially hard to get ahead. But the faster you pay them off, the more money you’ll save — and the closer you'll be to reaching your goals.

Here are some tips to help you destroy your credit card balances and eliminate debt.

Put the brakes on using your credit card.

It’ll be tough to make progress if you add to your debt during the payoff process. Instead, pay for your purchases in cash or use a debit card. Once your credit card balances are eliminated, continue to use cash or a debit card for purchases.

Here are tips to help you overcome impulse purchase temptation.

• Unsubscribe from Retail Emails: Reduce temptation by opting out of promotional emails.

• Unfollow Shopping Influencers: Don't let the allure of high-energy "shopping hauls" and "unboxing videos" tempt you into a shopping spree.

• Shop with a List: Planning your purchases ahead of time helps you stay focused and avoid tossing extra, unnecessary items into your cart.

• Remove Credit Card from Wallet: Instead of keeping it somewhere readily accessible, store it in a less convenient place so you're forced to pause and think before using it.

• Use the 24-Hour Rule: Wait a full day before buying any non-essential items. Your desire for the item may pass with time.

This is just the start, you can find even more tips in our post Curb Impulse Buying with These 8 Tips.

Create or update your budget.

Budget your way to a debt-free lifestyle and see where and how you can adjust your spending. Compare your monthly expenses to your balances and determine how much money you can use to attack your debt.

Here are common monthly expenses people often overlook. See what you can cut to free up extra cash to put towards your credit card debt.

• Subscription Services: Streaming platforms, digital publications, unused apps, and gaming.

• Dining Out: Coffee runs, takeout, meal delivery, lunches, and dinners.

• Memberships: Gyms, clubs, and wellness centers.

• Utility Costs: Leaving lights or electronics on, not using energy-efficient appliances, and frequent car washes.

• Add Change It Up To Your Account: With our debit card round-up program, Change it Up, you can easily save money and pay more towards your credit card debt.

You don't need to cut all of these expenses from your budget — but take a look and see where you can do without. Remember, you can always add them back to your budget once you're ready. And if you're looking for more help getting your budget started, check out our guide How to Create a Budget in 5 Steps.

Pay off your debt faster with the debt snowball method.

This includes all debt except your mortgage. This is how the debt snowball method works — instead of taking the highest balance head-on, pay off the smallest balance first. When your smallest balance is paid off, take what you were paying to that and add it toward your next lowest balance, and keep repeating until all your debt is paid off.

Use our free debt snowball calculator to see how quickly you can gain momentum to take down your debt.

Here are some tips to help you maximize the debt snowball method.

• Make Biweekly Payments: Split your monthly payment in two. This helps you make more payments per year and reduce interest growth.

• Automated Payments: Setting up automative payments will ensure you never miss a deadline — helping your avoid unnecessary fees and extra interest.

Put extra income toward debt.

Tax returns, bonuses, raises, money from side hustles — you’ll want to spend these kinds of extra income wisely. Quicken your payoff pace by using your additional cash flow to pay down your credit card balances.

Here are additional ways you can make extra income to put towards your debt.

• Sell Unused Items: Declutter your house and sell clothes, accessories, electronics, and furniture on platforms like Facebook Marketplace, eBay, and Poshmark.

• Monetize a Hobby: If other people love what you do they might be willing to pay you for it. Open a shop on Etsy or set up a stand at a local farmer's market.

• Drive or Deliver: Uber, Lyft, Door Dash, or Instacart are always looking for drivers and you can make your own schedule.

Don’t go it alone.

When trying to accomplish a challenging goal, it’s a good idea to have a dependable support system of trusted friends or family members. Not only can they keep you from veering off course, but they can also cheer you on along the way.

Here are ways you can build a sustainable support system.

• Share Your Goal: Let family and friends know you're working towards paying off debt. Ask them for ongoing encouragement and accountability.

• Find an Accountability Partner: Consider monthly or even weekly check-in with someone who's working on similar financial goals.

• Avoid Peer Pressure: Avoid situations where you might be tempted to stray from your goals.

• Join a Community: Look for online forums, Facebook groups, or local meetups focused on budgeting or debt payoff.

Paying off credit card debt isn't easy, but with the right tools, you can get it done even faster. Where are you on your journey to Financial Freedom? Find out now and take the Money Milestone Assessment. We’ll let you know which Money Milestone you’re on, what you’re doing well, and how you can reach financial freedom faster.