I hate credit card debt. It enslaves you to someone else and keeps you from reaching your goals. Finding ways to legally eliminate credit card debt quickly may feel like a challenge, but it’s certainly possible with some work.
Credit card debt is an unfortunate reality. The Federal Reserve reports that the average household has over $16,000 in credit card debt. If that same household is paying the average interest rate, that equates to hundreds of dollars, if not thousands, being added to unpaid balances, making it even more difficult to get rid of credit card debt.
Personally, I graduated with $25,000 in credit card debt (plus another $25,000 in student loans), and it took me five years to pay it off. I ended up in debt because I was financing a life I wanted, but couldn’t afford.
You may find yourself in credit card debt for a similar reason. It may also be a different reason, such as an unexpected emergency, or something else. If you’re committed to paying off debt, the reason really doesn’t matter as you simply need to begin attacking your debt.
Successfully paying off debt often takes doing a number of things to be effective. In fact, I can guarantee that will be the case.
The Best Action Steps to Legally Eliminate Credit Card Debt
Paying off debt can be a challenge but it can be done. If want to know how to eliminate credit card debt legally and quickly, here are some quick steps to get you going.
1. Reduce Your Interest Rate
Many ask “what is the best way to eliminate credit card debt quickly?” The best step to pay off debt fast is to reduce your interest rate. The average interest rate on a credit card is around 15 percent. If you have thousands of dollars in credit card debt that will only make it more difficult to become debt free.
You want to reduce your interest rate so more of your monthly payment will go towards the debt and not to the interest.
Fiona by Even Financial is a terrific option for this as you can often reduce your rates by half or more. Fiona lets you compare 17 lenders in under two minutes.
After completing a brief application, they provide you with quotes for the best matching lenders.
2. Cut Needless Expenses
One of the first things I did when I was paying off debt was to go through all my expenses and find savings opportunities. It was painful at first, but was a much-needed exercise and freed up a chunk of money to throw at my debt.
You want to go through all of your expenses and find where you can cut. Trim is a free tool to help you start.
Trim cancels old, unused subscriptions and negotiates with billers to help save you money. Take the savings and throw the extra at your debt.
If you’re looking for areas to save, here are seven simple ways to save more money that can save you hundreds each month.
3. Bring in Extra Income
Making extra money is a great way to eliminate credit card debt quickly. You can throw all the money at the debt, which will provide momentum and build traction on your debt freedom journey.
Many people think they don’t have the skills to make extra income. However there are many ways you can make extra money that require little skill.
If you feel like you don’t know where to start, online surveys can be a good way to monetize your free time. Here are a few of our favorite survey sites:
Survey Junkie – Survey Junkie is our favorite survey site as they pay you cash straight to PayPal, or let you redeem rewards for Amazon gift cards.
Pinecone Research: They pay $3 per survey, and they pay by Amazon Gift Card or virtual Mastercard. However, if you’ve joined Pinecone in the last 30 days, your first redemption must be by bank transfer to verify your rewards account.
Opinion Outpost: This is one of the top survey sites and has $10,000 prize drawings every three months.
InboxDollars: Earn money for taking surveys, watching TV or making purchases online. Get $5 just for signing up!
Another great option is to deliver meals for DoorDash. You can create your own schedule with DoorDash, so you can work whenever you want. The platform pays weekly and claims you can earn up to $25 per hour, with tips.
Bringing in extra income was key to my success in paying off debt. There are many options out there to make extra income. If you need ideas on where to start, here are some side hustle apps to consider.
4. Negotiate Lower Rates with Your Credit Card Companies
Sometimes the best way to get rid of credit card debt quickly is as simple as a phone call. Call the issuing bank, tell them you’re working to pay off your debt and ask if they can lower your interest rate.
You may not be successful with each bank, but even getting one to lower your rate will make your payments more effective at killing your debt.
5. Work With a Credit Consolidation Company
If you’re asking “how to get rid of credit card debt legally,” one possible option is to work with a debt consolidation company.
What is debt consolidation? Debt consolidation is very similar to working with a lender to group all your payments into one monthly payment. However, the debt consolidation company works on your behalf with lenders.
*Related: Have a check you need to cash? Here’s our guide on the best places to cash a personal check to get money now.*
It is important to keep in mind that many debt consolidation companies will charge you money in some form to work on your behalf, though not all. Additionally, the industry is full of scam artists.
You can check loan consolidation companies through the National Foundation for Credit Counseling as they vet all lenders and have a database of reputable, nonprofit companies that can help you pay off your debt.
6. Use a Balance Transfer Card
You know how suffocating interest rates can be with many credit cards. They make eliminating credit card debt difficult, not to mention far more expensive.
A great way to eliminate credit card debt quickly is to use a balance transfer credit card. Such cards typically will offer a low, or zero percent rate, for a period of time, allowing you to concentrate more of your payment at the debt.
Many of these cards will charge a fee of 3-4% (of the total being transferred) to process the transfer. The charge aside, it can be a great way to save money on interest.
Here are some balance transfer cards to consider in your attempt to get rid of credit card debt faster.
7. Stop Using Credit Cards
This may seem like a no-brainer, but it’s still important to include. I knew I had a problem and still used my credit cards for months.
It was a sickness, to be honest. I was addicted to spending, and my credit cards gave me the ability to scratch that itch. If you want to pay off credit card debt quickly, you need to stop using the cards.
Do yourself a favor and find a way to stop using your credit cards. You can literally freeze the credit card, give it to a trusted friend or family member or cut up the card (without canceling it).
Find whatever works to keep you from continuing to use the cards and go with it. The added debt isn’t worth the extra spending!
8. Sell Your Junk
How much stuff do you have lying around your house that you’re simply not using? If you’re like many, you likely have hundreds of dollars sitting around the house that you can turn into cash to throw at your debt.
The best selling items sitting under your roof can range from something like an old smart phone to clothes you no longer wear to old video games.
You can sell items using a variety of options, such as Facebook Marketplace, Craigslist, or Gazelle. Many know about the first two options.
Gazelle allows you to sell old electronics and get cash back. Go through your house to find items you’re no longer using and turn that into extra cash to reduce debt.
9. Pay Off the Smallest Debt First
A lot of paying off debt comes down to building confidence. That confidence builds momentum that helps you eliminate credit card debt quicker. My favorite way to do this when I was paying off debt was to pay off the smallest balance first.
*Related: What is “good” credit? Get answers and learn how to improve your credit in our credit score scale guide.*
The amount was only around $500, but paying off gave me the feeling that I could actually be successful at becoming debt free. Some will argue that it makes more sense to pay off the highest rate card first.
There is merit to that argument, but paying off debt is often an emotional thing. Building momentum can go a long way to help show your emotions that debt freedom is a possibility.
First Steps to Take
Before you can make a plan of attack, you need to take a few steps. Here’s how to start.
10. Know How Much Debt You Have
Knowledge breeds power. If you need to eliminate credit card debt for good, you first need to know how much debt you have. Pull out each card, log in to your account and find out how much you owe on each card.
Add up each balance and determine your total amount of indebtedness. You may be afraid to do this. I get it. I felt the same way. Don’t let that stop you. Instead, face up to reality because it will give you power.
Take it a step further and figure out the interest rate you owe on each card. Remember, if your rate is 15 percent or more, you will likely benefit from consolidating that debt with a lender like Avant or Payoff as it will help you slash rates.
If Avant or Payoff don’t work, check out other best unsecured loans options to help you reduce your interest rates.
11. Make Your Debt Visual
Visuals can be powerful in helping keep you motivated to get rid of credit card debt. Visuals come in a variety of forms.
You can create a debt payoff schedule or a chart to mark off each thousand dollars of debt slashed. Put the visual on your fridge, bathroom mirror, workplace, or anywhere else you might see it on a regular basis.
The goal is to keep it front of mind so you’re regularly motivated to strive towards debt freedom.
12. Enlist the Aid of a Friend
Credit card debt can feel especially isolating. You may feel ashamed or like you will never achieve debt freedom.
This is where a friend can be of great help. You want a fan in your corner who will challenge you, encourage you and cheer you on to victory.
These are all important in the pursuit of debt freedom as they help you look past the emotion and keep moving forward.
Find a friend who won’t judge you, but is open, honest and trustworthy. Personally speaking, finding a friend who was there for me kept me going at times I wanted to give up on paying off debt.
13. Know How Much You Spend Each Month
Tracking your spending is a vital part of managing your finances, whether or not you’re working to get rid of credit card debt. Tracking my spending was a foreign concept when I first started out. Now, I see that I wouldn’t have been successful without it.
Tracking your spending sounds difficult, but it’s not. You just start by writing down everything you spend money on – regardless of the amount. This will show you where your money is going each month and is the first step to #2 above.
A service like Tiller makes tracking your spending quite simple. Tiller connects to your bank account and automatically pulls all of your transactions and puts them in a Google Sheet.
This lets you go through your spending and find potential savings opportunities.
Tiller offers a free trial for the first 30 days, and is then $7 per month if you decide to keep the service.
14. Make a Budget
This should flow from tracking your spending. Many people think a budget is restrictive. On the contrary, budgets give you freedom and a guide on how to spend your money.
If you don’t know where to start with a budget, here’s a great guide on how to make a budget. I had never used a budget before paying off debt; now I wouldn’t live without it as it helps guide our financial decisions.
15. Know How Much You Earn
Remember #3 above? You need to know how much money you’re bringing home each month. Compare this amount against the total minimum payments required each month.
The smaller the difference, the longer it will take you to eliminate credit card debt. The larger the difference, obviously, the shorter the timeframe.
There are countless ways to increase that difference, from asking for a raise to finding ways to make extra money and more.
What are some other ways to legally eliminate credit card debt quickly? What are some crazy things you’ve done to pay off debt? What is the first thing you should do when paying off debt?