Pay Off Credit Card Debt For Good: A Complete Guide

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There is nothing more depressing in your financial life than staring at a credit card balance that you CANNOT pay off.

If you have ever felt STUCK, with no way out, you are not alone. This is a crushing weight that has 1 in 11 Americans stating they feel they will “never be free from credit card debt.” (1)


Today we’re going to solve the problem, get you on a plan to get yourself out of debt, and change your entire MONEY MINDSET. We’ll walk this through step-by-step so you can take action TODAY.


Current State Of Credit Card Debt

As of 2018, almost 2 out of every 3 Americans (59.4%) use a credit card, and the total credit card debt reached a staggering $799,000,000,000 (according to Experian)! The average balance per person on their credit cards is $4,239. This means the average consumer has over $4,000 on their credit card that rolls over, charging interest EVERY MONTH.

And the average credit card interest rate is over 19%. WOW!

That means not only are most people in the hole over $4,000, they are paying over $60 per month in interest alone.

But How Did You Get Here, Anyway?

The only way to pay off credit card debt problem is to start at the very beginning. Most credit card debt is the result of purchasing something you can’t actually afford, while only looking at the minimum payment. Hint: This goes for ALL debt.

Example: My lovely wife got her first credit card when she was 18 years old. She wanted to buy something from Nordstrom, but didn’t have the money. So she signed up for a store card and asked the ill-fated question “what’s the minimum payment?”

Once she found out it was only $20, she immediately bought $100 worth of merchandise with no second thought. BOOM! She was now in credit card debt.

Eventually, she ballooned the balance to its maximum of $400, because

“the payment was still only $20, so why not? I’d rather pay $20 per month than give up $400 right now.”

What she didn’t know was she was paying 20% interest on those purchases, and was on track to basically NEVER pay off the credit card. She would have paid at least $400 in interest alone had we not gotten on a budget plan to pay it off quickly.

Her $400 in purchases would cost her over $800 in the long run. OUCH!

The Minimum Payment Problem

It’s no wonder many people cannot seem to pay down their balance, because a HUGE percentage of their payment is going to interest alone. Let’s take the average $4,000 balance and see how paying the “minimum payment” works out.

A quick test using this calculator shows that a $4000 balance at 19% interest making the minimum payment will take 158 MONTHS to pay off, and you will pay $3,900 in interest! That is 13 years and DOUBLE the money for the convenience of owning something now instead of a little but later.

But Isn’t Carrying A Balance Good For My Credit Score?

Short answer: No

Long Answer: No

But seriously, this debt myth needs to be crushed, as it’s a mindset that can keep you in debt forever.

Your credit score can be a bit complicated, but the bottom line is that someone lending you money wants to know if you will make your payments, or not. The score reflects your ability to handle your money obligations (payments, debt, etc).

And someone making the minimum payment vs. someone paying off their balance EVERY MONTH are treated exactly the same way.

So just file this one away as MYTH BUSTED, and never borrow money again to “boost your credit score.”

How To Pay Off Credit Card Debt. Forever.

I think we can all agree that credit card debt is bad. Always.

And now that you know what got you here in the first place, it’s time to create an action plan to get out of the debt cycle once and for all.

But please, DO NOT READ THIS is you are not serious about getting out of debt.

There are no “get out of debt” pills that magically make it go away. This is going to take a REAL commitment to change your money habits and NEVER get yourself in this mess again.

You need to ask yourself:

“Am I ready to stop buying what I cannot afford and make this change forever?”

Are you ready?

Let’s go!

Step-By-Step Guide To Pay Off Credit Card Debt Forever

Step 1: Stop Using Credit Cards For Anything

  • Move all automatic payments to your debit card or bank account. This includes utilities, cell phone, streaming services, and any other recurring payments that are on your credit card.
    • Write down a list of all bills.
    • Log in to your online account for each, and input your debit card/bank account details
    • Change your automatic payments/preferred payment method to your debit card/bank account
    • DELETE your credit card as a payment option
    • Repeat for all services and bills
  • DELETE YOUR CREDIT CARDS FROM AMAZON.COM and any other online retail stores.
    • But seriously, Amazon makes it WAY too easy to spend money, so make sure you delete ALL credit cards from there. And maybe just delete the Amazon App altogether to curb impulse spending and REALLY make some progress on your debt.
  • Remove Credit Cards From Your Wallet and Destroy Them

This may seem silly, but you need to make a HARD commitment to STOP credit card usage completely.

I suggest you cut up every credit card with a pair of scissors. If you don’t own scissors, maybe you need to re-think your life choices find a local shredding event, or just borrow some scissors from that one neighbor…..you know the one.

Some people are too scared to destroy their cards, so another tactic is to DEEP FREEZE your cards in a block of ice in the freezer! Just add a few ice cubes to a gallon Ziplock freezer bag, put your cards on the ice cubes, fill with water, and stick in the freezer.

This still gives you access to the card (which is bad), but as you take it out and wait for it to thaw, hopefully you think long and hard about WHY are you sitting there watching ice melt. It will feel ridiculous, because it is. You can DO THIS without the card!

Step 2: Tally Up Your Total Balance On Each Card

  • You want EXACT payoff details, so call up each credit card company and ask for the “payoff amount.” This will give you the total amount to be able to pay it off and close the account (obviously changes each month, but it’s the best starting point).
  • Write each balance down, preferably in a place that you can see every day. A good whiteboard or chalk board should do the trick.
  • I recommend putting them in order of total balance, with the SMALLEST balance card at the top of the list (explained in more detail below)
  • At the bottom, write down your total credit card debt amount. This number may be a punch in the gut when you first see it written down, but USE THAT as motivation to kill it FOREVER.

Step 3: **MOST IMPORTANT STEP** Get On A Budget!

This step is as simple as signing up for my newsletter, Downloading My Budget Template and watching the below “how to” video that is included . Make a plan for the money you earn so you can see how much is available to start tackling this debt.

Or for a full breakdown, read my complete article on How To Start A Budget

Step 4: Create A “Payoff Plan”, Starting With The Smallest Balance (Debt Snowball Method)

  • Write down your debt balances, starting with the smallest balance on top. (Hint: Sign up for my newsletter, and get access to my Debt Snowball Worksheet)
  • Pour 100% of your FOCUS into getting the smallest balance paid off as quickly as possible.
  • Start paying the Minimum Balance on every other card. ANY and EVERY extra dollar you come across NEEDS to go to lowest balance card only.

The goal here is to get you a quick WIN with debt. This will allow you to experience the full cycle of stopping credit card usage, destroying the card, paying off the debt, and NEVER using that card again. Trust me, freedom is contagious! (Plus, the Harvard Business Review agrees with me on the psychology of this method)

Don’t worry if it feels like you are going slow at first, THIS IS NORMAL. Remember, a snowball starts as the size of a golf ball, but as you get rolling, it becomes exponentially BIGGER.

  • Once you pay off the first credit card, you take all the money you were paying toward it, plus the minimum payment on the NEXT SMALLEST debt, and put it toward that card.
  • You can see how each time a credit card is paid off, the snowball gets BIGGER, and BIGGER as you eliminate the minimum payments and increase your momentum. This is KEY, and is the best way to keep up the motivation to see this plan through to the end.
  • Repeat the payment plan on each card until you pay off EVERY card balance to ZERO, and cancel your cards!
    • Note: If you can remove the physical card from the equation, I do recommend keeping the card with the “longest history” open. This can help your credit score, even if you NEVER use it. Length of credit history is a factor in your score. BUT, if this is too much of a temptation, feel free to close them all and just enjoy your debt freedom. Your credit score is really only important when purchasing something like a HOME, and your debt payoff journey will HELP your score, as will paying all your bills on time.

Once you are a subscriber, download the “Debt Snowball Worksheet” and input all of your credit card balances, starting with the smallest on top.

Step 5: Refinance To Save Money

As your are tackling your credit card debt, you can significantly lower the interest rate on your cards by refinancing through a reputable loan company.

I have a small handful of places I recommend doing this, depending on your situation:

  • Upstart – For those with little or no credit history
  • Lightstream – For those with more credit history (offers very low rates)
  • Credible – Will actually compare rates of loan providers for you

This can help you save hundreds (or thousands) on interest in the long run.

But remember, unless you follow a plan to pay off the debt, refinancing won’t get you there quicker.

Step 5: Celebrate Every WIN!

Paying off debt is NOT FUN. And that’s ok. But you NEED to celebrate each and every milestone to reflect on where you were, and how far you have come.

  • Plan to have a “mini-celebration” each time you pay off a credit card. Now, don’t go crazy, but spend a few dollars enjoying the fruits of your labor, and enjoy that you are MAKING REAL PROGRESS toward your goals.
  • Maybe it’s a date night, or a “just for fun” purchase that you can enjoy and remind yourself that YOU GOT THIS! I suggest keeping it under $75 so as to keep your true focus of DEBT FREEDOM.

Bonus Step: How To Avoid “Emergencies” And Never Get Back Into Credit Card Debt. Ever.

Your credit card debt freedom journey WILL have setbacks. You can count on it. BUT, you can build these setbacks into your plan to ensure you don’t reach for a credit card when an “emergency” arises.

Step 1: Build An Emergency Fund. If you don’t have one already, do this BEFORE paying off your cards. I HIGHLY recommend building a small Emergency Fund to guard against all the “unexpected expenses” that can throw your plan off track and tempt you to go back into credit card debt.

  • I recommend a FULL MONTH OF EXPENSES in a savings account that you CANNOT TOUCH unless you have no other choice. This is for TRUE EMERGENCIES ONLY, not for expenses that you can plan ahead for (see below for details)

Step 2: Plan for infrequent expenses with Savings Buckets. Christmas, birthdays, events, vacations, car repairs, annual insurance premiums, etc. are EXPECTED EXPENSES. None of these should come as a surprise, and therefore should be planned for in your monthly budget.

  • Simply take the total of the expense, and divide into an amount needed to save each month. For example, if you want to spend $800 on Christmas, take $800 / 12 month = $75 per month.
  • Do this for ALL infrequent expenses so they can’t “surprise” you when they come up
  • Create a separate savings account for all of these expenses, and automate your savings toward them. I suggest opening a CapitalOne 360 Account which allows you to create and individually name as many savings accounts as you want.
  • Hint: Use MY LINK and get a $25 bonus
  • Inside each savings account, go to “transfer” and select the frequency that works for you (usually bi-weekly or monthly). Usually you want to do this a day or so after you get paid.
  • Now each category gets funded automatically, and when the “surprise expense” occurs, then money is already there. BOOM!

Using your “Savings Buckets” for the infrequent expenses, and the “Emergency Fund” for true emergencies will ensure you never have to reach for a credit card again. No more revolving balance, no more interest. Forever!

Commit To This Plan Today!

Credit card debt is rampant in today’s culture. There is no concept of “delayed gratification.” You buy what you want, when you want, and pay for it later (with MASSIVE interest).

But you can break the cycle.

If you follow the above plan, you WILL pay off credit card debt quickly and FOR GOOD! And you WILL build good money habits that will put you on the path to financial freedom!

We’ve reviewed WHY credit card debt is bad (and expensive), HOW you got into debt in the first place, HOW TO STOP the bleeding right now, and a STEP BY STEP PLAN to pay off credit card debt FOREVER.

The ball is now in your court.

If you are DONE with credit cards and sick of paying hundreds in interest for the privilege of carrying debt, then COMMIT to putting this plan into action today!

Sign up and get access to your Credit Card Debt Snowball Worksheet and take back your financial life!

Jacob Wade

Jacob Wade

Jacob Wade has been a nationally-recognized personal finance expert for the past decade. He has written professionally for The Balance, The Spruce, LendingTree, Investing Answers, and other widely-followed sites. 
He’s also been a featured expert on CBS News, MSN Money, Forbes, Nasdaq, Yahoo! Finance, Go Banking Rates, and AOL Finance.

In 2018, Jacob quit his job and his family decided to sell everything (including their home) to take off on an adventure. They traveled the country in an RV for nearly 3 years, visiting over 38 states, 20+ national parks and eventually settling in the sunshine state!

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