5 Tips for Paying Off Your Credit Card Debt This Year


Let’s be honest: finances aren’t easy. If they were, we would all be rich. Building wealth takes time, hard work, and a little financial savvy. But the good news is you’re already putting in the effort by reading this article, and Central Willamette Credit Union has some great tips to help you out.

One of the first steps to building wealth is paying off credit card debt. In order to accomplish your financial goals, you want to make compound interest work for you, not against you. So rather than losing money in interest to credit card companies, you can make that compound interest work to your advantage by saving or investing that money instead. To help you get started, here are five tips for paying off your credit card debt this year.

1. See Where You Stand

In order to take complete control over your finances and pay off your credit card debt, you first have to understand what you’re dealing with. It may be a difficult first step, but you should sit down and calculate exactly how much you owe.

If you like working with numbers, create a spreadsheet or document with all your credit card balances, minimum monthly payment amounts, interest rates, and due dates. It’s also fine to just jot it down on a piece of paper. The important thing is to see it in front of you and be able to access it when needed. This will help you know exactly where you stand with your debt.

Also, examine the fine print on your statement. Many credit card statements tell you exactly how much time it will take to pay off your debt if you’re only making the minimum monthly payment. This will give you a sense of how long it will take to be debt-free based on your monthly minimums. Now that you have a good sense of where you stand and how much you owe, you’re ready to take the next step.

2. Find the Right Method for You

There are two popular approaches for paying off credit card debt—the snowball and the avalanche methods. Here’s how they work:


With the snowball method, you start by paying off your smallest debt. Once that debt is paid off, you can add that monthly minimum payment to the next smallest debt on top of what you’re already paying.

When your second debt is paid off, combine both monthly minimum payments and apply that amount to your next debt on top of that debt’s monthly minimum. You repeat this process until your debt is completely paid off, creating a larger and larger snowball along the way as the payments you put toward your smallest debt grow bigger and bigger.


With the avalanche method, you’re going to go back to that sheet you created in the first step and find out which of your debts has the highest interest rate. You’re going to tackle that debt first. Then, like the snowball method, you’ll apply the minimum amount of that payment toward your next highest interest rate debt once the first debt is paid off.

The advantage of the snowball method is that you gain momentum by paying off your smallest debts first. You can celebrate your small successes on the way to the big win. The advantage of the avalanche method, on the other hand, is that you’re getting rid of the debts with the highest interest rate first, saving yourself more money in the long run.

There really isn’t one method that’s better than the other. The right method is simply the one that’s going to motivate you to pay off your credit card debt faster.

3. Throw Extra Money Toward It

In order to pay off your credit card debt as quickly as possible, you should put any extra money toward it as well. Is there an area in your budget where you can cut back? If so, put that extra amount toward your debt.

If you’re living paycheck to paycheck right now and just trying to stay afloat, you may feel as though you can’t afford to cut back anywhere. If so, think about how you can earn extra income. Is it possible to pick up an extra shift at work? What about starting a side hustle, like delivering food or groceries? If you get creative, there’s usually some way to find a little extra side money.

If you can earn extra income, great. Throw that extra money toward your credit card debt until it’s paid off. If you feel like you’re already overworked and stretched thin, not to worry. We can come up with some creative solutions for helping you pay off your credit card debt.

4. Apply for a Balance Transfer

We told you earlier about the power of compound interest. Compound interest can work for you, such as when you’re saving money that accrues interest, or it can work against you, like when you’re losing money toward the interest on your credit card debt. But you can take that power back by finding ways to lower your credit card interest rate.

You can try calling your lender to see if you can get your interest rate lowered, but that doesn’t always work. Some lenders will likely tell you that there isn’t a lower interest rate available. If so, shop around. Many lenders offer credit cards that have low interest rates on balance transfers for a certain period of time.

We know because we’re one of them. Central Willamette Credit Union offers a credit card that does not have an annual fee or a balance transfer fee. You can consolidate your credit card debt and pay a low APR of 1.99% for the first year. This will help save you money in interest and may even reduce your overall monthly minimum payment.

5. Kick the Habit

Once you pay off your credit card debt, kick the habit of using credit cards for good. Rather than paying high interest to credit card companies, you can make that money work to your benefit by enrolling in a high-yield savings account instead.

It may seem at times as though the odds, and your credit card debt, are stacked against you. But with some smart money moves, you can get your finances in order and tackle that credit card debt fast. If you’re ready to get started, give us a call. We’ll help make this the year that you kick your credit card debt for good.