When most people realize that they’ve racked up a significant amount of credit card debt, they usually have two thoughts. The first one is that they need get the debt paid off as soon as possible, and the second thought is how they’re going to manage paying off multiple credit cards, each with their own high rate of interest.

5 Ways to Approach Paying off Credit Card Debt

As it turns out, there are five proven tactics to make paying off credit card debt easier. Some of them can even save you money! 

The Snowball Method

This is quite possibly the most well-known tactic to pay off not just credit card debts, but multiple debts in general. Here’s how it works:

• Make sure you’re making the minimum payments on all your debts
• Look for the debt that has the lowest balance
• Use all the extra money you can find in your budget to pay off that debt
• Once you’ve paid off your lowest debt, use that money to pay off the debt with the next lowest balance

With each debt you pay off, you’ll have more money to put toward the debts that remain, like a snowball getting bigger as it rolls down a hill.

The snowball method has several advantages. You’ll make progress faster than you would trying to pay off your debts equally, and that progress can give you motivation to tackle your bigger debts. However, you might also end up paying more interest in time than you would otherwise, since you’re not tackling the debt with the highest interest first.

The Reverse Snowball Method

The reverse snowball method of paying off credit card debt is the same as the snowball method. Instead of focusing on the debt with the lowest balance, though, you focus on the debt with the highest balance and move to the debt with the next highest balance once you’re finished.

When you use the reverse snowball method, you’re not going to see the progress you would in the original snowball method. Once you get the largest debt paid off, however, you should start paying off debts faster than you would with the snowball method.

Take your first step to becoming debt free!

The Avalanche Method

If you’re concerned about the interest you’re paying on your debts, you might want to pay off debts with the avalanche method instead. This is another tactic similar to the snowball method, but instead of focusing on the debt with the largest or smallest amount, you instead tackle the debt with the highest interest rate.

This probably won’t leave you feeling like you’re making as much progress as you would with either of the snowball methods, but you will more than likely save money in the long run. If you know you can keep yourself motivated paying off your credit card debts, you might want to try this method.

Transfer your Debt to a New Credit Card

The worst thing about credit card debt is the high interest rate. If you use a balance transfer, though, you might be able to avoid paying interest on at least one of your credit card’s balances.

If you’re going to transfer the debt on a current credit card to another, you’ll need to find a credit card that’s actually offering a zero-interest balance transfer promotion. Once you find one, open up a new credit card and transfer the balance from one of your old credit cards to it, then aggressively pay off the balance.

Keep in mind that the zero-interest promotion won’t last forever, and once it’s gone you’ll have to pay interest on the balance. It’s also worth remembering that the new credit card might have fees of its own, such as an annual fee that you’ll need to pay.

Take out a Debt Consolidation Loan

The final tactic you can use to pay off credit card debt is to get a debt consolidation loan for the total amount that you owe. You then use that money to pay off your debts.

A debt consolidation loan has a lot of advantages over paying off credit card debt directly. If you have multiple credit cards, for instance, you won’t have to worry about making multiple payments each month. Instead, you can just make one convenient loan payment.

Another advantage of a debt consolidation loan is the lower interest rate. Paying off a debt consolidation loan is almost certainly less expensive than paying off your credit cards directly.

Got questions about how to pay off debts? Ask us!

Pay off Your Credit Card Debt with First Alliance Credit Union

Paying off credit card debt is never a fun way to end the holiday season. However, you can use several tactics to make paying off your debt easier. You could choose the debt with the smallest balance or highest interest rate to pay off first, transfer your balance to a credit card with a 0% promotional interest rate, or even take out a debt consolidation loan.

If you need help paying off your credit card debt after the holidays, become a member of First Alliance Credit Union today and take advantage of our debt payoff tools. In addition to our guide to paying off debts, we also offer a free downloadable debt organizer, and our lending advisors will be happy to work with you if you want to apply for a debt consolidation loan.