How to Pay off Credit Card Debt When You Have No Idea Where to Start

How to Pay off Credit Card Debt When You Have No Idea Where to Start

More than 40% of American households carry a credit card balance, with an average balance of more than $9,000, according to a study from the financial data website ValuePenguin.


But here’s the tricky thing about credit cards: They only benefit you when you’re building credit and receiving perks — but not when you’re paying interest. If you’re paying a lot of interest on your balances, credit card companies are making money off of you.

Your cards are using you, not the other way around.

With average interest rates on new credit cards north of 17%, according to, paying them off is a smart move. You can do it. And it’ll be worth it.

5 Ways to Pay off Debt From Multiple Credit Cards

detail of a fist with credit cards between his knuckles

Before you start, try to stop using your credit cards altogether until you can use them without putting yourself in financial risk. Though the specifics will vary based on your situation, we only recommend using credit cards if:

  1. You don’t have any debt outside of a mortgage or student loans.
  2. You have an emergency fund with three to six months of expenses saved.
  3. You can pay off your balance in full every month.

However you do it, make paying off your credit cards — and learning to use them responsibly — a high priority.

First, determine how much credit card debt you have. You can do this using a tool like Credit Sesame, a free credit monitoring service.

Credit Sesame will also show you how to raise your credit score. James Cooper, a motivational speaker, raised his credit score 277 points following suggestions from the site.

Then choose your weapons! We’ll go over five different methods for paying off your credit card debt.

1. The Debt Avalanche

Instead of looking at your debt in its entirety, we recommend approaching it bit by bit. By breaking your debt down into manageable chunks, you’ll experience quicker wins and stay motivated.

Two popular ways to break down debt repayments are the debt avalanche and debt snowball methods.

Using the debt avalanche method, you’ll order your credit card debts from the highest interest rate to the lowest. You’ll make minimum payments on all your cards, and any extra income you have will go toward the highest-interest card.

Eventually, that card will be paid off. Then, you’ll attack the debt with the next-highest interest rate, and so on, until all your cards are paid off.

2. The Debt Snowball

With the debt snowball method, you’ll order your debts from the lowest balance to highest, regardless of the interest rates on the cards. You’ll make minimum payments on all your cards, and any extra income will go to the credit card with the smallest balance.

Starting with the smallest balance allows you to experience wins faster than you would with the avalanche. This method is ideal for people who are motivated by quick wins, but it has a downside: Those who choose it could end up paying more interest over the long term.

Here’s an example of how each method would work if you’re paying off four credit cards of varying balances and interest rates.

  1. $654 with 0% interest
  2. $5,054 with 15% interest
  3. $2,541 with 23% interest
  4. $945 with 17% interest

If you followed the avalanche method, you’d pay off card No. 3 first, followed by No. 4, No. 2 and No. 1. If you followed the snowball method, you’d pay off card No. 1 first, followed by No. 4, No. 3 and No. 2.

Let’s say you have $600 per month to put toward debt. Using the snowball and avalanche comparison calculator from Dough Roller, you can see that it would take you 18 months to pay all of your cards off using either method.

The debt avalanche method would save you $105.73 of interest in the end, but you’d pay off your first card six months earlier by going with the snowball….Read more>>




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