Start By Calculating Your Total Debt
Use our debt tally worksheet to list all of your debts. List on the spreadsheet:
- Credit Card Issuer
- Interest Rate
- Minimum Payment
- Payment Due Date
Calculate How Much Extra You Can Pay Each Month
Set up a budget and see how much money you can put towards debt each month. If you are not happy with how much money you have to pay off, consider cutting costs or finding additional income.
- See: Setting Up A Budget
Choose A Strategy for Paying Of Credit Card Debt
Strategy One: Pay off the card with the smallest balance first
Why: This strategy builds pay-off momentum.
Here’s how to do it:
- Pay only the minimum payment due on the cards with larger balances
- Pay additional on the card with the smallest balance
- When a card is paid off, apply the additional payment to the card with the next smallest balance
Strategy Two: Pay off the highest interest card first
Why: This saves the most money in interest.
Here’s how to do it:
- Pay only the minimum due on cards with smaller balances
- Pay additional on the card with the highest interest rate
- When a card is paid off, apply additional payment to the card with the next highest interest rate
Explore Other Options for Paying Off Debt
- Talk to the credit card companies
Credit card issuers may be willing to waive fees, reduce interest rates, or accept lower minimum monthly payments.
- Talk to a credit counselor
Certified credit counselors will work with you to develop a budget and a debt repayment plan. See our information about working with credit counselors.
- Debt consolidation
Debt consolidation allows you to roll your debts into one monthly payment. Debt consolidation is not for everyone. Be sure to do your research.
Under the provisions of the Servicemembers Civil Relief Act (SCRA), you may qualify for a reduced interest rate on mortgage payments or credit card debt, protection from eviction, or a delay of all civil court actions, such as bankruptcy, foreclosure, or divorce proceedings. To find out if you qualify, contact your local Armed Forces Legal Assistance office.
- Find A Certified Credit Counselor
Credit counselors can help you develop a plan to pay off your debt.
- Financial Counseling Association of America
Financial and credit counselors that can help you develop a debt reduction plan.
- How To Get A Handle On Debt
Information from the Consumer Financial Protection Bureau.