How to Get Out of Credit Card Debt

Using a credit card is like going down a tall slide. It’s fun. But when the ride ends, the climb back up is long and arduous. With credit cards, the climb is the part where you have to repay all of your purchases.

If you feel like you’re drowning in too much credit card debt, do not panic. The situation isn’t pleasant and the solution takes work, but there are concrete steps that will allow you to get rid of credit card debt, which allows you to take steps to financial freedom.

Working out of credit card debt is a painful, difficult process. And it’s one that many in the U.S. understand:

• In 2025, Americans owed more than $1 trillion in credit card debt.
• The average interest rate on credit card accounts with balances was about 9%.
• According to the Federal Reserve Bank of New York, total U.S. household debt rose by $93 billion, bringing it to $18.04 trillion.
• More than 82% of American adults have credit cards

List All of Your Debts

The first place to start is not complicated: List all debts including mortgages, car loans, credit cards, student loans, etc. If you don’t have an easy way to list them, a free copy of your credit report, which does list all your debts, is available at AnnualCreditReport.com.

You can get the credit report from each of the three major reporting agencies (Experian, Equifax, and TransUnion) for free once a week. It will have all your creditors and how much you owe.

List what is owed, the interest rate and the monthly payment. You now have a snapshot of where the money needs to go, and who is charging the most interest.

It is important to monitor your credit score for any changes and check your credit report for mistakes or inaccuracies that could drag down your score. You can also use a credit card payoff calculator to determine how long it will take to pay off your credit card and how much interest you will pay.

Lower Your Interest Rates

Interest charges provide wealth to banks but stress to borrowers. Though it may seem easy to use plastic for a purchase, in the long run it’s more expensive if you can’t pay the bill when on time.

Think in real terms. That big-screen TV with the bajillion pixels cost $1,200. Paying $50 a month on that TV at an interest rate of 18% would take 30 months to pay off and eventually cost $1,498.75. That’s an additional $300 of interest payments – or the cost of a Nintendo Switch.

Consumers can try to negotiate a lower interest rate with their credit card companies and that’s a call you should make. It’s worth it. Card companies would rather consumers pay something each month than see them default. Be polite and honest with the representative, but don’t be afraid. You matter every bit as much as the person on the other end of the phone.

When you call, have an idea what rate you’d like. That will help as you negotiate. Tell them your positives – how long you’ve had the card, how your on-time payment record is good and that your credit score is improving. If the first try doesn’t get you where you want, don’t fret. Try again. Or wait several weeks, call again, and tell them you’ve got a competitor’s card with a better rate, and you’ll switch if your current company can’t match the offer.

The old saying is true … if at first you don’t succeed ….

Other options to consider for lowering your interest rates include:

• Balance transfer credit cards: You can move high-interest balances onto a new card with a 0% introductory APR offer, giving you a window to pay down debt without added interest. Just be sure to pay it off before the promo period ends, usually in 12-18 months.
• Personal loans for debt consolidation: Taking out a fixed-rate personal loan to pay off credit cards can lower your overall interest and simplify multiple payments into one predictable monthly bill.
• Credit card debt consolidation: Combining several credit card balances into a single account or loan can reduce your average interest rate and help you stay organized as you work toward becoming debt-free.

Finally, consider turning to a nonprofit credit counseling agency like InCharge Debt Solutions, which may be able to help consolidate credit card debt, lower interest rates and reduce your monthly payment with a debt management plan.

Make a Budget & Follow It

When making a budget, list your expenses and be honest with yourself: What is really necessary? Fixed expenses are those like mortgages, car payments, utilities, and insurance. They are a part of life almost everyone must accept. Variable expenses might include a gym membership, dining out or entertainment. Cutting back on those expenditures can be painful, but that could mean finding extra money to pay off the credit cards.

Here’s a step-by-step budgeting framework you can use to get started:

1. List Every Expense: Start by writing down everything you spend in a month from rent and groceries to streaming services and coffee runs. The goal is to see where your money actually goes.
2. Group and Track Categories: Break your expenses into categories like housing, transportation, food, entertainment, and debt payments. Use a spreadsheet or a free budgeting app to track how much goes into each bucket.
3. Compare Spending to Income: Subtract your total expenses from your take-home pay. If you’re overspending, look for categories you can trim like subscriptions, takeout, impulse buys, etc.
4. Allocate Extra Money Toward Debt: Once you have a handle on your numbers, redirect as much as you can to high-interest debts first (usually credit cards). Even an extra $50–$100 a month can shorten your payoff timeline.

Another budgeting approach that has grown in popularity in recent years is the 50-30-20 model pioneered by U.S. Senator Elizabeth Warren (D-Mass.), in her book, “All Your Worth: The Ultimate Lifetime Money Plan.” Warren proposes dividing income into three pools: 50% for needs (food, mortgage, credit card payments), 30% for “wants” like entertainment or nights out, 20% to savings, which is important to have for an emergency. Ideally savings should be able to support you for 3-6 months if you lose your income.

Choose a Debt Repayment Strategy: Snowball vs. Avalanche

When it comes to paying off credit card debt, two popular strategies stand out: the debt avalanche and the debt snowball. Both can get you to the finish line, but the difference lies in how you get there.

The debt avalanche method focuses on paying off the debt with the highest interest rate first, while making minimum payments on the rest. Once that balance is gone, you move to the next highest.

• Pros: Saves the most money over time and helps you pay off debt faster.
• Cons: Progress can feel slow at first, which might make it harder to stay motivated.

The debt snowball method takes the opposite approach. You pay off your smallest balance first, regardless of interest rate, while maintaining minimum payments on larger debts.

• Pros: Quick wins build confidence and motivation early on.
• Cons: You may spend more on interest in the long run compared to the avalanche method.

If you’re motivated by momentum, the snowball might fit your style. If you want the most efficient financial path, go with the avalanche. Either way, consistency is what turns progress into freedom.

Cut Extra Spending

Again, the most basic step is the most obvious: Stop buying unnecessary items with a credit card. Emergencies like a blown water heater may change the outlook but if it’s even remotely possible, stop charging things.

And stop spending extra. Instead of using that extra $40 to watch a sports event at a restaurant, stay home, cook on the grill, and enjoy the game in the family room. The stress level will go down if the team struggles – this approach has been especially wise for Browns fans the last 20 years – and the recliner with the drink holder is more comfortable than a bar stool.

Also take a look at your subscriptions and determine which ones you can do without. Many streaming services now offer bundles that can save you money.

Sticking to the budget is an exercise in will and commitment. It’s like riding those giant roller coasters: It’s only hard the first time. Make a budget, cut unnecessary spending and stick to the plan. The time for frolic and fun will arrive soon enough. Until then, these choices can go a long way toward lowering credit card payments.

Find Ways to Increase Your Income

Ask for a raise; the worst that happens is the boss says no. If they say yes, apply all the extra income to pay down your debt.

See if you can add a second job. Even an extra $50 or $100 a month to apply to credit card debt matters.

Of course, the second job can be easier said than done, especially if there is a family and you’re a single parent and the finances seem to be overwhelming. But in this economy, there are options that were not there 10 years ago, through the gig economy.

Driving for Lyft or Uber, delivering meals for DoorDash, walking dogs via Rover, buying, and delivering groceries with InstaCart … all can provide some extra income that can be applied to debt and would require just a few hours a week. And they are done on your time. Don’t want to drive or deliver meals on Tuesday? Do it on Wednesday. Setting aside that money for debt repayment is a disciplined way to attack the challenge.

You should also consider selling what you don’t need. Clear out your closet or garage and list items on eBay, Facebook Marketplace, or Poshmark. It’s quick cash and less clutter.

If you have any freelancing skills, put them to use. Writing, graphic design, tutoring, or social media are all avenues for income on platforms like Upwork, Fiverr, or TaskRabbit. Even a few hours a week can add up.

Avoid Payday Loans, Debt Settlement Scams & Quick-Fix Traps

There are folks out there who will offer “easy” ways to get out of debt. Be wary, ask questions and read the details.

Checks from credit card companies may seem appealing, but they usually come with extra-high interest rates, which means that instead of reducing debt you’ve added to it. Payday lenders typically charge outrageous rates of 400% that only serve as a boulder tied to your feet, rather than a step out of debt.

Some credit cards will offer promotional deals that include zero interest. These are appealing options. But … read the fine print. Twice. Most of these deals require the total to be paid in a set time (12-18 months).

It can’t be stressed enough: Using a promotional zero interest rate can be effective, but you must be disciplined to make sure the loan is paid off in the time agreed to initially.

Also, before agreeing to this “deal,” check to see if there is a balance transfer fee, and the cost. Most charge 3% of your debt and some charge as much as 5%. All of these are steps by card companies designed to get your money. Zero interest is great but read the fine print. Then read it again. Then if you’re not sure about something, have a friend or family member read it, to be sure.

Debt relief scams often claim they can “wipe out” your debt or “negotiate everything for pennies on the dollar.” The Federal Trade Commission warns that legitimate programs never guarantee results or demand upfront fees. Always verify the company’s credentials before sharing personal or financial information.

Avoid payday loans and certain for-profit debt settlement companies, which can make things worse, not better. Payday loans carry sky-high interest rates that trap you in a cycle of borrowing, while many settlement firms charge heavy fees and can damage your credit if they stop your payments.

Seek Professional Credit Counseling or Debt Relief Options

Counselors are here to help. In the same way a counselor can help individuals emotionally during a tough time in life, a financial counselor can help during tough financial times. That is their job.

A counselor can help with a debt management plan, or if the situation requires it, personal bankruptcy. He or she can help with debt settlement – which means a company or counselor negotiating better terms on your debt with your creditors. Check the fees before committing to this approach, though.

Credit counseling is a free service that provides help with budgeting, becoming debt free and offering money management tips. Credit counseling is offered by nonprofit agencies and is sometimes called debt counseling. It involves a 30-minute interview with a certified credit counselor who gathers information about your financial situation and helps develop a plan that lets you regain control of your finances.

Some organizations even provide credit card debt forgiveness programs, like those offered through InCharge Debt Solutions, which can help lower your balances and simplify repayment.

Credit Card Debt Consolidation Options

If juggling multiple credit cards feels overwhelming, consolidation can simplify repayment and lower costs. You’ve got a few paths to explore:

• Debt Management Plans (DMPs): Offered by nonprofit credit counseling agencies, these plans combine your unsecured debts into one monthly payment. Counselors work with creditors to lower interest rates and monthly payments, making it easier to stay on track.
• Debt Consolidation Loans: You take out one new loan, ideally with a lower interest rate, to pay off multiple credit cards. This can save money on interest and make payments more predictable, but it only works if you avoid running up new balances.
• Balance Transfer Credit Cards: Some cards offer 0% APR for 12–18 months on transferred balances. If you can pay off your debt before the promotional period ends, you could save big on interest. Just watch out for transfer fees and rate hikes once the offer expires.

When to Consider Debt Forgiveness or Bankruptcy

If your debt feels unmanageable despite your best efforts, it might be time to explore bigger solutions.

Debt forgiveness programs such as those offered by reputable nonprofit organizations like InCharge, can help reduce the amount you owe, though eligibility often depends on financial hardship and your creditors’ policies. These programs can be a lifeline for those who qualify but beware of scams that promise instant results or demand upfront fees.

Bankruptcy, on the other hand, is a legal process designed to give you a fresh start when there’s no other realistic option. It can eliminate or restructure unsecured debt, but it also has a severe negative impact on your credit for several years and may involve giving up some assets.

FAQs About Paying Off Credit Card Debt

Should I close credit cards after paying them off?
Not necessarily. Keeping accounts open can help your credit utilization ratio, which boosts your credit score. However, if a card tempts you to overspend or carries an annual fee, it may make sense to close it.

Is debt consolidation bad for my credit score?
Initially, it can cause a small dip because of a hard inquiry or new account. But over time, consistent payments and lower credit utilization can actually improve your score.

What is the fastest way to pay off credit card debt?
Focus on high-interest balances first (the avalanche method), or if you need motivation, start with your smallest debts (the snowball method). Combine that with a strict budget and any extra income from side hustles to accelerate your payoff.