Credit card debt is one of the most pernicious financial problems. Tackling it successfully can be difficult, but it's far from impossible. A good way to pay off credit card debt is to follow this step-by-step guide: (1) assess your situation, (2) negotiate lower rates, (3) consider consolidation or balance transfers, (4) have a goal, (5) spend less and/or earn more, (6) follow something like the "snowball" strategy, and (7) succeed.

Here's a look at why you shouldn't just make minimum payments, followed by a path to pay off credit card debt.

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Beware minimum payments

You need to understand how bad an idea it is to just make small or minimum payments. It can look like the least painful way to gradually pay off your debt, but it's not. Imagine, for example, that you owe $20,000 on your credit card(s) and that you're being charged a 25% interest rate. (That 25% can seem wildly high and it is -- but it's also a common rate. Many cards jack up your interest rate to between 25% or 30% if you're late with a payment and it's easy to be late when you owe a lot.) If your minimum payments are 3% of your balance, you'll be starting out paying a whopping $600 per month, meaning you'll have to come up with $150 per week. If you can't, your balance will be growing, digging you deeper in debt.

But let's say you do make that $600 payment and all future 3% payments. How effective will that be? Well, according to a calculator, it will take more than 30 years to pay the debt off, and your total payments will exceed $63,000 -- all for a $20,000 balance owed.

Minimum payments are best for banks, not for debtors. It's much more financially sound to make maximum payments. Below are some steps that can help you do just that. 

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Step 1: Assess your situation

First, assess your debt situation. Get a piece of paper and your credit card statements. List all your balances owed and the interest rates associated with each debt. Add in any other debt, too, to get a full picture of your debt situation. (Not all debt is problematic, of course. It can be hard to avoid getting a mortgage if you want to buy a home, and these days mortgage loans are available at nearly rock-bottom rates.)

Get copies of your credit reports as well and check them for errors. By law, we're all entitled to a free copy of our credit report annually from each of the three main credit agencies -- visit to order yours.

Step 2: Negotiate lower rates

One key aid in getting your debt paid off is reducing your interest rate(s). The review of minimum payments above shows how problematic it is to make progress if your debt is increasing at a faster rate than you can pay it off.

It's underappreciated how possible it is to get a lower interest rate on your debt -- just by asking. According to a recent report by, 69% of cardholders who asked for a lower interest rate got one. Of course, getting a lower rate is not guaranteed. The answer you get might be no. If it is, you still have other options. 

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Step 3: Consider consolidation and/or balance transfers

It's not required to consolidate your debts and/or transfer balances owed to credit cards with more favorable terms, but it can be an effective tactic in your battle against debt. You can look into student loan consolidation at, and many people consolidate debt by transferring balances from multiple credit cards onto a new card with better terms.

Be careful choosing that better card, though. Understand that balance transfer credit cards vary in several ways. Each will tempt you with an ultra-low initial interest rate -- typically 0%. That interest rate will be in effect between 6 and 21 months, after which a more standard interest rate applies. That standard rate will not necessarily be a great one, so you should seek out cards with relatively low interest rates following your teaser-rate period. Better still, simply get your debt paid off during that period. Note that your credit score will likely influence the interest rate you're given after the 0% rate expires.

Most balance transfer cards will also charge a balance transfer fee. It will typically be between about 3% and 5% of the sum you're transferring or $5 to $10 -- whichever is greater. Thus, if you're transferring $20,000 in debt and paying a 4% balance transfer fee, it will cost you $800. That's a lot, but it might be worth it -- if, for example, you were previously paying, say, 17% or more on the card.

Look into the fine print of any balance transfer card you're considering to find out what your credit limit will be with the card. Many times, you won't be able to know until you get approved for the card. You won't be able to transfer more than that limit (less the balance transfer fee, if there is one), and if you exceed the limit, you might face a fee. Find out if there's a penalty APR, too. That's when the card company jacks your interest rate up to 25% or even 30%, if you pay a bill late or commit some other transgression. Many cards don't feature them, and that's preferable.

Aim to pay off your debt on your balance transfer card before the teaser rate ends -- and if you don't think you can, perhaps opt for a low-interest rate card instead. 

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Step 4: Have a goal

As you go through this process, you'll want to develop a main goal and perhaps also some smaller ones. For example, you might have assessed your situation and found that you owe $25,000 in credit card debt. If so, you might set a goal of paying that off in three years. (Choose a very specific time frame, so you can work toward the goal and mark your progress.) You can set sub-goals as well, such as having a quarter of it and then half paid off by certain dates. Write down your goals and post them where you will see them.

Step 5: Spend less and/or earn more

Next comes some of the harder work involved in paying off credit card debt -- actually paying it off. To do so, you'll need to devote many dollars to the cause. You can get some of it by spending less and some by bringing in more money. Here are some suggestions:

  • Spend less by brown-bagging lunches and making your own coffee in the morning. Consider cutting the cable cord and streaming your entertainment instead. Cut out subscriptions such as gym memberships and eat at home more instead of dining out. Have friends over to play board games or watch movies instead of going out to bars or shows. This may all sound not so fun, but you're tackling a tough project and you need to be aggressive about it. The longer you take, the more dollars you'll be burning in interest. Drafting a new budget to keep your spending in check is also helpful. 

  • Earn more money by taking on a part-time job if you can. Working 10 more hours a week for a year at $12 per hour can generate $6,000 pre-tax. Possible jobs include ones at local retailers as well as doing work at home, perhaps by tutoring students or teaching music or a language. You might do freelance writing, editing, graphic design, or consulting. Think about all the things you might sell. If your household has two nice cars, can you sell one and get by with just the other for a while? Might you sell one or both and replace them with a less costly vehicle or two? Are there items in your basement or garage that you could sell? Depending on where you live, you might be able to rent out a parking spot or space in your home via Airbnb, but make sure you check local ordinances first. 
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Step 6: Follow a strategy

Figure out what strategy you'll be employing in your plan. One school of thought suggests the "snowball" approach, where you pay off your smallest debt first, so that you feel a sense of momentum building. Another approach is more rational and less emotional: paying off debts with the highest interest rates first in order to minimize your interest expense.

Step 7: Stick to it and succeed

Finally, the last step of your get-out-of-debt plan should be this: Succeed!

It can be hard to believe that you'll ever dig yourself out of debt -- especially if your debt is massive -- but know that many people have successfully paid off more than $100,000 of debt. It's not always easy, but it's very possible, and it will leave you much stronger financially, with a better credit score and the ability to save for retirement and meet other fiscal goals.