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How to Pay Down Your Credit Card Debt

Trying to break free from credit card debt? Rather than aimlessly making minimum payments every month, consider adopting a debt-repayment game plan.

To get started, try taking these steps to tackle your debt.

Get the full picture

Start by listing out all your debts. Record the following information about each:

  • Name of loan
  • Remaining balance
  • Interest rate
  • Minimum payment
  • Payment due date

You’d be surprised how much stress you can eliminate just by getting organized.

Calculate budget for debt repayment

A hard look at your budget will reveal how much you have available for debt repayment each month. To find this amount, subtract your monthly essential expenses (mortgage/rent, utilities, groceries, car payments, health insurance, etc.) from your monthly net income (your pay after taxes and deductions are taken out). What’s left over is your “disposable” income — in theory, the maximum amount you could put toward your debt each month.

Still, we live in the real world. Spending all your disposable income on debt repayment is a lot to ask. Instead, look for ways to cut back on fun activities or other non-essential expenses and put that money toward debt. That could mean cutting back on dining out, cancelling your Spotify subscription, or making similar sacrifices. Once your debt is more manageable, you can always add those back.

When you’re done cutting expenses, you’ll have a rough idea of what you could be putting toward debt each month.

Prioritize your highest-interest debt

Your goal here is to pay off your highest interest debts first. To do that, take the following steps:

  1. Go back to your list of debts and organize them from highest interest to lowest.
  2. Calculate the total minimum payments of all your debts.
  3. Subtract that number from your disposable income.
  4. Use the remainder to make an extra payment toward your highest-interest debt.

Let’s say you have $800 available to put toward credit card debt each month and your debts list looks like the following:

Name of loan

Cash-back credit card

Travel credit card

Remaining balance



Interest rate



Minimum payment



Payment due date

1st of every month

15th of every month

The total minimum payments of all your debt ($300 + $170) is $470. That leaves you with $330 remaining from your $800 budget. Put that $330 toward the cash-back credit card. So this month, you will have paid $630 toward the cash-back credit card and $170 toward the travel credit card.

Repeat this exercise each month, making sure you update the remaining balance and minimum payment figures as you continue to pay down your debts. Eventually you’ll completely pay off your highest-interest credit card; then you can focus on the next-highest credit card until you’re totally debt free.

Look into consolidation options

The three steps outlined above can help you tackle your credit card debt. However, high interest rates make credit card debt a particularly challenging obstacle. What if you could consolidate all your debts into a single payment with a set end date and a lower interest rate, all at the same time?

Either a home equity line of credit (HELOC) or personal loan could do just that.

Let’s go back to the example above. Instead of slowly paying off one credit card at a time, a home equity line of credit or personal loan in the amount of $23,500 would instantly pay off all of your high-interest credit card debt. In exchange, you would now have one $23,500 line of credit or loan serviced through a single monthly payment.

And then there’s the potential interest savings. Some credit card interest rates can exceed 13%. Meanwhile, HELOC rates are generally in the 4%-8% range, and personal loan rates could be in the single digits as well. Interest rates vary from person to person depending on the prime rate, your credit history, and loan amount.

Reminder: HELOCs use your home as collateral, so make sure you’re confident you can keep up with repayment before opening one.

Consolidating can provide peace of mind. By making the full payment due each month, you will pay off your debt by the loan’s end date.

Contact credit card counseling, if needed

If you’re having trouble keeping up with your minimum monthly payments, you might consider looking into credit counseling. The National Foundation for Credit Counseling (NFCC) is a non-profit whose trained debt counselors could negotiate lower interest rates for you and consolidate your debt into one monthly payment.

What to remember

Being in credit card debt is stressful. Getting organized and creating a repayment plan (and sticking to it) can help alleviate that uneasiness. Then, once you’ve freed yourself from credit card debt, work to develop better credit habits so you don’t find yourself back in this situation again.

More information

Need help paying off credit card debt? Learn how a HELOC or personal loan could help you consolidate your debt into a single monthly payment and potentially lower your interest rate. Or you can schedule a Citizens Checkup at your nearest Citizens Bank branch.

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