How to Deal with Credit Card Debt

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With attractive promotions like low introductory APRs and exclusive discounts, signing up for a new credit card can be tempting. However, these offers eventually expire, and credit card debt can quickly pile up and take years to pay off if you don’t pay your bills on time.

The reason why credit card debt can be particularly overwhelming is due to the high credit interest rates that accumulate every month. If you are only able to make minimum payments each month, credit card companies typically charge additional interests and fees on top of what you owe.

This is why you should be taking precautions and following strict measures to tackle any existing debt.

Know how much you owe

The first step to settling your debts is figuring out how much you owe per creditor. Make a list of monthly payments, interest rates, due dates, and minimums. This way, you can have a more realistic overview of your debt situation

Referring to your list and regularly updating it can help you stay motivated as you continue to pay off debt. You can even use debt reduction software or a mobile app to gain a better understanding of your goals.

Make a bill payment calendar

If you have multiple credit cards, it can be quite tricky to keep track of monthly due dates. To avoid getting behind in terms of debt, it can be helpful to note down each date on your smartphone or desktop calendar. Add an individual alert several days before your due date.

The more late payments you make, the more difficult it is to pay off your credit card debt. You’ll have to pay late fees for every payment you end up missing and your interest rates can potentially increase if you miss two or more payments in a row.

If you do miss a payment, sending it as soon as you remember to do so can is much better than waiting until the next monthly due date.

Avoid settling for minimum payments

To get out of debt, you should avoid paying the bare minimum amount that is listed on your credit card bill. While this may seem appealing at first, you’ll stay in debt for a longer period of time and your interest charges will also grow depending on your credit card policy.

In addition, this can also impact your credit score due to a poor credit utilization ratio. While paying a larger amount per month means that you’ll probably have to sacrifice some of your typical expenses, it’s a much better long-term strategy in terms of reducing credit card debt.

Try the avalanche method

Also known as debt stacking, the avalanche payment method involves paying off credit card debt from the highest interest rate to the lowest. While it may take some time to see progress, you can avoid the highest interest rates in a short period of time.

The first step is making the minimum payment on all of your accounts, then putting as much money as possible to the credit card with the highest interest rate, followed by the next card with the second-highest interest rate. After a while, you’ll start seeing reductions in your debt as you can more momentum.

Check out the snowball method 

In contrast to the avalanche method above, the snowball method involves paying off your debts from the smallest to the largest by following the same steps. This is an effective method if you have multiple smaller debts to pay off and can help you achieve faster gratification.

However, you’ll end up paying more over time because you might not address high-interest rates first. Despite this, it can be a good approach if you don’t qualify for a balance transfer or low-interest personal loan to address your debt situation. It can also boost your credit score if you can reduce your total number of outstanding balances.

Transfer your credit card balance to a different credit card 

If you have credit card debt, you can try transferring your existing credit card balance to another card. For instance, if you have an account with a higher interest rate, you can transfer its balance to a credit card that has a lower interest rate so you can pay less money over time.

You can use this method at the same time as the avalanche method, buying you additional time to focus on the next-highest interest amount. It works by paying off credit card debt using another card with more favorable terms in the long run.

Work with a debt settlement company

A debt settlement company can help tackle your existing credit card debt by negotiating with your creditors on your behalf. They typically ask for a lump sum or settlement that is less than the full amount you owe, to be paid over the course of 36 months or more.

However, there are some unscrupulous debt settlement companies that fail to give you the results you’re after, collecting their own fees before you’ve settled any of your debts or failing to make good on their guarantees. It’s a good idea to do research on prospective companies so that you don’t go further into debt.

Search for any lawsuits related to unfair practices, and other consumer complaints. You can also ask your local consumer protection agency and Attorney General if the company is licensed to work in your state.

Talk to your credit card company

Instead of contacting a company to negotiate lower interest rates on your behalf, you can try calling your credit card company yourself even if you’ve been turned down previously. Being persistent yet polite about your current situation can help you work out a payment plan that is more manageable for you to handle.

Sometimes, creditors are willing to negotiate with you especially if you have a long business relationship with them. If your credit score has recently increased or if you have a history of making payments on time, they’re more likely to grant your request.

Look into getting a personal loan

If your credit card debt is overwhelming and the typical debt repayment strategies aren’t effective, you may have to consider a different approach. If you have different existing balances credit cards, you may benefit from a low-rate personal loan. Do your research into different loan providers and see whether you can get a lower rate.

The good news is that using a personal loan can improve your credit score because it is an installment loan, unlike a revolving debt on your credit card. It can also make debts more manageable by covering your debts that have higher interest rates.

Speak with a qualified credit counselor 

A reputable credit counseling organization can provide you with personalized advice on how to manage your funds and debts, learn how to budget, and solve any existing money problems. Many of these are non-profits and offer in-person counseling, online, or phone options depending on what’s more convenient for you.

Before choosing an organization to work with, check the U.S. Trustee’s list of approved organizations to be sure. You can also consult your bank or local consumer protection agency for more information. However, not all of these services are free or affordable so it’s best to check for any hidden fees beforehand.

Consider filing for bankruptcy 

Although declaring bankruptcy may have negative consequences including lowering your credit score, it might make sense in certain situations. If you file for bankruptcy under Chapter 13, you can keep your property that you might lose under the Chapter 7 process. However, you’ll need to pay a lawyer and get credit counseling before filing.

Once you file for bankruptcy, you’ll have protection from creditors including credit card companies who may want to send you collection letters, file a lawsuit against you, or call you to settle any debts.

Think about refinancing your mortgage 

Lastly, you can also tackle credit card debt by refinancing your existing mortgage. This means changing the terms of your mortgage by applying for a larger mortgage through a cash-out refinance loan. Through this method, your existing loan can be paid off and you’ll be able to use the difference between the new and old mortgage to pay off debt.

This can be a suitable tactic if your current mortgage has higher than average interest rates so that you can take advantage of a lower interest rate and save more money over time. Ideally, finding a loan that offers an interest rate reduction of 1% to 2% is the best move.


When you’re overwhelmed by credit card debt, it might feel like there’s no way to settle your existing balances. However, staying calm and tackling your debts one by one can help you become debt-free in the very near future. By practicing mindful spending and seeing which technique works best for you, you’ll be able to breathe a sigh of relief.

Do you have any personal tips and recommendations on how to tackle credit card debt? Feel free to leave a comment below and start a conversation!

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