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You want to pay off your credit card debt. You’re tired of how it leaves you stressed out, with little in your bank account.

You’re not alone. Credit cards offer easy access to funds. Debt can rack up fast, especially if life throws you an unexpected curve. 1 in 10 credit card holders pay more in interest and fees than toward principal, according to a 2023 report.

There is hope. While getting out from under a load of credit card debt isn’t easy, it’s worth the effort. A world of financial freedom awaits.

As a partner in your well-being, Numerica can walk you through paying off debt of all kinds.

Here are 7 steps to clearing your credit card debt.

Step 1: Face credit card debt head-on

Knowledge is power. You need to understand the true reality of your credit card debt so you can develop a plan to clear it. Here’s how:

• Gather the monthly statements from all your credit cards.
• Write down the interest rate, payment due date, missed payment fee, balance owing, and any annual fees for each card.
• Calculate your total debt and total minimum payments for your cards.

Step 2: Set a motivating goal

At times, sticking to your plan may feel impossible. Having a clear goal in mind can help keep you on track. Your goal should motivate you by reminding you of why you’re paying off your credit card debt. 

What type of goal motivates you?

• Timeframe: I want to be debt free in one year.
• Incentive: I want to go on a vacation once my debt is gone.
• Financial: I want better interest rates and need to clear my debt.
• Emotional: I want to set a good example for my family.

Know your goal? Think about how you will feel when you make that last payment. As you make sacrifices for your goal, hold tightly to this picture of your future.

Step 3: Draft your spending plan

A spending plan, or budget, helps you focus your debt-reduction efforts. To get the most out of your spending plan:

• Use a free tool like Numerica’s budgeting workbook
• Create spending limits for each category of expenses
• Find savings to pay down your debt
• Cut expenses that aren’t necessary
• Update your plan regularly to keep it aligned with your goals

Step 4: Focus on credit card debt repayment

To clear credit card debt faster, put every extra dollar you have into repayment. Commit to a strategy that makes the most sense for your situation. Here are two that have helped many people.

Avalanche method: focus on highest interest

1. Make the minimum payment on all your cards to avoid late fees and finance charges.
2. Pay extra on your credit card with the highest interest rate.
3. Once that card is paid off, put those funds toward the card with the next-highest interest rate.

Snowball method: focus on building momentum

1. Make the minimum payment on all your cards to avoid late fees and finance charges.
2. Pay extra on your credit card with the smallest balance.
3. Once that card is paid off, put those funds toward the next smallest balance.

Regardless of the strategy, keep going until all your cards are paid off.

Step 5: Bring in more money, not more debt

Nothing jumpstarts your debt repayment like a boost of income. Can you find a freelance job or side hustle to fast-track your plan? You can also sell a big item or put a bonus toward the debt.

On the flip side, avoid adding more debt to your credit cards while you’re working to pay them off. Little things can help you break the credit card habit:

• Use cash or your debit card for purchases
• Delete saved credit card information from online stores you frequent
• Remove credit cards from digital wallets

Step 6: Consider debt consolidation

Consolidation is another avenue to explore. This option refinances multiple credit card debts into one loan. The new loan should have a lower, more manageable rate and payment. This might be a personal loan, HELOC, or balance transfer credit card.

Warning: Many people rack up new debt with this option. Once you pay off your credit cards, it’s tempting to begin using them again. Before you consolidate, adjust your lifestyle and spending habits.

Step 7: Ask an expert for help

Numerica can assist you with a plan to tackle your credit card debt. Reach out to us.

We also partner with GreenPath Financial Wellness to offer free, personalized guidance. Certified financial counselors can help you create a comprehensive plan for paying off your credit card debt.

Habits for life-long success

Each time you pay off one of your credit cards, celebrate the win. Then take a moment to reflect on what healthy habits or changes you want to continue with. Once you pay off all your cards:  

• Put some best practices in place if you start using credit cards again
• Revamp your spending plan to focus on a new goal
• Use our workbook to tackle other debt in your life

Helping you live well means Numerica is with you every mile of your journey. We love answering your questions and pointing you to resources that can help. Come see us at your favorite branch or call 800.433.1837.