What Is The Best Way To Pay Off Credit Card Debt – 4 Simple Steps

So you have credit card debt, I get it and trust me you’re not alone. Not in a long shot. There are several people around the world that are in search daily on how to pay off credit cards.

According to the most recent data from the Survey of Consumer Finances by the U.S. Federal Reserve, credit card debt of U.S. households is approximately $5,700.00 in the year: 2019-2020.

Average Credit Card Debt by Income:

Average American Household Debt $5,700.00 USD
Total Outstanding U.S. Consumer Debt $3.9 Trillion USD
Total Revolving Debt $1.03 Trillion USD
% Of Households Carrying Some Sort Of CC Debt 41.2 %

APRIL 2018 $1,031.00 $825.00 $9,333.00
APRIL 2017 $1,029.00 $822.00 $10,821.00
APRIL 2016 $999.00 $799.00 $11,184.00
APRIL 2015 $939.00 $751.00 $10,762.00
APRIL 2014 $890.00 $712.00 $10,450.00
APRIL 2013 $852.00 $682.00 $9,884.00

So basically what that means is that people in the U.S. are spending way too much money with credit cards, and has become a new way of life. But it doesn’t have to stay like that. Paying down your credit cards is actually a lot easier then you may think. So, what is the best way to pay off credit card debt altogether? I’m go to tell you in 4 easy steps.

What Is The Best Way To Pay Off Credit Card Debt?

Some people prefer to use the snowball effect to pay down their credit card debt, which is basically is by paying off the debt from the small balances to the large balances, paying the minimum payments, except the small CC (you would wan pay them off immediately). Once you pay off one card, close the account, and so on. Basic approach, but that could take years depending on how much debt you have.

So, instead, we are going to focus on 4 strategies that I like to call “The Core 4” to becoming debt-free.

  1. Find out your current financials & target each debt one at a time
  2. Pay more than the minimum payment requested
  3. Consolidate high-interest rates to a smaller interest rate card
  4. Create a new prioritized budget that fits you’re living habits. (necessities only)

Write down your current financial budget

The first thing you’re going to do is grab a piece of paper and a pen and make a list of all your credit card debt, in order from the largest balance to the smallest, including the interest rates, early payment penalties, etc. This goes for any credit cards. (amazon, macys, PayPal-cc, etc) All credit card debt period. If you only have one credit card, you’re already in better shape than most. But for those who have several, make sure you make at least the minimum payment ON TIME EVERY MONTH going forward, on each card you have.

Then in write down your current financials (your budget you are currently living by monthly). And don’t leave anything out, this list is not to cut back on your financial spending yet, we’re getting there next. This is to see exactly what you are currently spending on a monthly basis.What Is The Best Way To Pay Off Credit Card Debt

Next, you are going to cross-reference the list and remove the monies spent on things that are not deemed essential. When I refer to not deemed essential, I’m referring to what is absolutely necessary to survive monthly and on a strict budget. You are an adult and you have the control over what you spend. It is nothing but mind over matter and one of the important steps in how to pay off credit cards.

Yes, you’re going to have to skip out on Zomba class for the month, or some marimba dancing class with your girlfriends, or maybe playing at the pool hall on a league for a month or two with the guys, but it is only temporary and will be worth it in the end. You will be able to resume a much more comfortable lifestyle sooner then later if applied correctly.

Once you get a grip on your financial spending, it will be a paved road for financial freedom and your chances of success will increase 10 fold. Over time you’re going to focus on paying down the balance on one card at a time but first, you need to get organized.

Targeting you’re debt

You can do this two different ways.

    • Pay off the card with the smallest balance first, then take the money you were paying for that debt and use it to pay down the next smallest balance.
  • OR
    • Check the interest rate on to see which credit card charges the highest interest rate, and concentrate on paying off that one first.

Pay more than the minimum payment request

If you review your credit card statement (s), you’ll notice that it will take you much longer to pay off the balance if you only pay the minimum payment. By paying more then the minimum requested payment you’ll not only pay less in interest overall but the time it will take you to pay off the debt will be much shorter.

Not everyone knows this, but every credit card company is required to have a chart laid out for you on your statement showing you by example if you were to pay $__.__ it would take you ___  amount of months to pay off the balance and cost you $__.__ overall. (the __.___ would, of course, be filled in with your information correlated to your account and interest rate)

Pay just a bit over the minimum requested amount each month at first. Every dollar spent over the minimum payment will go towards the balance. And the smaller the balance, the smaller the interest.

This is actually designed to help people avoid the possibility of entering in such a position where you need to reach out to ask someone what is the best way to pay off credit card debt? But very little people read the fine print or seem to take the time to learn how to effectively leverage the benefits of a credit card. And it’s not your fault. Why would most credit cards want to teach you how to pay off credit cards, when they can continue to make more money from you with compounded interest?

One of the biggest issues I have with the education system is that they do not teach students about money, how to use money to make money, invest, leverage the most important tool that is used in business to make money, Currency. I can almost guarantee that the amount of credit card debt would be much lower if they did.

Consolidate and Succeed!

When you hear the term “consolidating debt“, it means when you combine

several higher-interest balances into one card with a lower overall rate, so you are able to pay down the debt faster without increasing the payments much. (This is most important for the people who have several credit cards with high debt)What Is The Best Way To Pay Off Credit Card Debt

If you have several credit cards and you fall into this category, and I strongly recommend you consolidate your debt. And, it’s very important that you control you’re spending. You want to avoid racking up new debt on top of the debt you’ve just consolidated. That would be counterproductive.


These are two different ways you can approach consolidating your debt:

    • Take advantage of a low balance transfer rate to move debt off high-interest cards. Be aware that balance transfer fees are often 3–5 %, but the savings from the lower interest rate may often be greater than the transfer fee. Always factor that in when considering this option.
  • OR
    • If you have equity in your home, you may be able to use it to pay down card debt. A home equity line of credit may offer a lower rate then what your cards charge. Be aware that closing costs often apply, but an extra benefit is that home equity interest payments are often tax-deductible.

OK, moving on to the last and the most important part in order to maintain the effort you have put in to lower your debt and become closer to being financially free, but you still haven’t mastered how to pay off credit cards.

Create A new prioritized financial budget

Begin by making a new list and categorizing your monthly spending just as you did before. Except this time you’re going to structure your budget to fit your financial situation. The amount that you bring in every month (round down not up), your full-time job, any child support, side hustles, online businesses or affiliate marketing teaching classes, or trust funds set up to you from a family member, everything to the penny.

In order for you to create a strict financial budget, you must know exactly what you are working with. And be sure to have a category for about 50-100 for an emergency situation. (I know that seems like a small amount for an emergency, but we are taking baby steps here)

For example- groceries, transportation, housing, and entertainment, clothing, electric/heating/gas/water, cable & internet, cell phone, pet supplies, medication/prescription (look into prescription savings plans), etc.

Many credit card debt companies provide a helpful tool for you, on each monthly statement. There should be a section showing you your monthly spending and automatically categorized as an attempt to provide insight on what and where you made CC transactions for. (this can become a very useful tool to help track your spending and restructuring a tighter spending budget, which will teach you the beginning steps of how to pay off credit cards)

Lets recap

The biggest take away from this is you need to change your spending habits and focus on the absolute necessities. So now that you know what is the best way to pay off credit card debt, when will you start applying it? It doesn’t mean you have to live a boring life and not go out and worry about following the new budget, you’ll drive yourself crazy that way! LOL Take it slow and follow the steps I laid out for you. I tried to keep them as simple as possible without getting too complex and confusing.

There are several other ways people try to get themselves out of debt and it doesn’t usually work out good for them in the end. So I suggest you stay away from any of the following tactics.

  • Debt Settlement Companies
  • Debt Relief Funding Programs
  • Pulling from a 401K loan

What Is The Best Way To Pay Off Credit Card Debt

All risky decisions and I do not recommend them. You take too big of a chance on the possibilities of not being able to pay it back and racking on massive interest, penalties, taxes on withdrawals, and other hidden fees these companies use to just to make money off you. I’m All set and I recommend you be as well.

If you have any questions, please feel free to leave a comment below. I wish you the best of luck. Just stay consistent. I once got out of over 135,000 in CC debt by practicing this exact 4 core system. It took me about 17 months, but it could have been a lot longer. Talk soon!

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10 thoughts on “What Is The Best Way To Pay Off Credit Card Debt – 4 Simple Steps”

  1. Hi

    Great Information on How to pay off credit card debt.

    Getting into debt can be easy when always shopping around for materialistic items that we want rather than need. This is a great guide to help all of us get out of credit card debt and hopefully avoid it in the future.

    Great Post


  2. Thank you for this great advice, we all should begin to take our debt as our responsibilities. Pushing it to debt settlement companies is not a good way to go.  Enough of pushing our debts to debt settlement companies who in turn increase our problems rather than providing solutions. We can work debt free

    1. I couldn’t agree with you more. I always recommend people stay away from debt settlement offers and borrowing against your home equity because you never know what can happen and then you could lose your home. 

      Thanks for sharing Parameter!

  3. Hi Paul, I took my time to thoroughly your article and I can say categorically that you have wonderful post, it’s so informative and educative. Most point raised here are helpful, so many people spend the money they do not have. I have in the United States here facing this Sam debt problem due to the same. I will recommend your website so she can on how to overcome her debt challenges. Thank you 

    1. No problem Peter. Share the link to the post with anyone you feel it may help. One of the biggest struggles young adults have is acquiring credit card debt and not knowing how to effectively find debt relief. 

      And paying down your debt without being taken advantage of by so many debt relief programs that will just cause you to acquire more debt, and then it becomes compound interest! It’s crazy!

      Thanks for sharing. Best of luck!

  4. Hello there! thank you for sharing this highly informative post. For  most persons, debt is like an illness that never goes away. It persists and persists, never truly getting better until action is taken. And like an Illness debt can cause a great deal of suffering and pains.

    I sure will follow these steps in getting rid of debts.

    1. I follow those core 4 steps like my life depends on it. It is the most logical, fastest way to get out of debt and the fastest. 

      I am glad I could help. Thanks for sharing! 

  5. All sound advice. As some one who has read and followed some of the biggest names in the money game I can attest that is the CORE of most of their strategies. This is structured well and get pretty much to the point. I have cut my personal debt in half (approx. $24,000 down to $12,000) in a single year(2019) I followed this strategy more or less. I believe the key is to stay focused on the prize. With the current state of the economy I am now in a better position to weather the storm of uncertainty. All the best for those in the struggle.  

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What Is The Best Way To Pay Off Credit Card Debt