How To Reach Your Goal Of Paying Off Your Credit Card Debt

Becoming credit card debt free

Credit card debt can put a serious drag on your net worth. That's not a surprise when you consider that most banks offer credit cards with double-digit interest rates. And, they require monthly payments that only cover a portion of the outstanding balance. It’s no wonder that many people struggle to break the cycle of never-ending credit card payments.

"Credit card debt can put a serious drag on your net worth."

If getting rid of your credit card debt is one of your financial goals, use these steps to achieve your credit card debt free goal.

1. Stop Adding To Your Debt

Credit cards offer what is called a “revolving line of credit.” The portion of credit you pay down every month is available for you to use for the next billing period. This can leave you in a never-ending cycle of charging purchases on your credit card, then making your scheduled minimum payment, followed by the additional spending of the available credit remaining.

To banish the cycle of credit card debt, avoid any additional spending on your credit cards. Opt to spend cash instead. This way, even when you make your minimum payments your balance won’t grow due to new charges.

2. Create A Budget For Your Spending

Once you've committed to only making purchases when you have the money on hand, creating a budget is your next step. Develop a spending plan each month that accounts for not only your savings, bills, and debt payments, but also any other spending, like unplanned trips to Target. Don't add to your credit card debt for these things.

This spending plan will help you be more mindful of your purchases. It'll also provide a reference to compare what you planned to spend on your actual charges. Consider checking in on your planned versus actual spending, at least weekly. This will help you take the guesswork out of what adjustments you’ll need to make to stay on track. Then, you can avoid taking on additional credit card debt.

3. Build Up A Cash Cushion

 A lack of emergency savings or a financial buffer to cover an unexpected medical expense can contribute to credit card debt. That’s why it’s important to build up a cash cushion to avoid creating new debt when these situations come up. Start by establishing a separate account for an emergency fund of at least $1,000, as well as a stash of cash for car repair and other variable expenses.

If you are not sure how much you need to save for a cash buffer outside of your emergency fund, review your last twelve months of spending. Identify the total amount of unexpected expenses you charged on credit. Use this as your initial cash buffer goal.

4. Increase Your Cash Flow To Put More Toward Debt

Not keeping track of your cash flow—the amount of money moving in and out of your accounts—is a sure-fire way to rack up credit card debt when your cash runs low.

Set aside time to increase your cash flow, through careful planning of when you spend, cutting your expenses and exploring ways to increase your income. With an increase in cash flow, you can scale back your reliance on credit cards and use the cash you free up to pay down your credit card debt.

5. Create A Strategy To Pay Down The Debt

You will eventually repay your credit card debt by making your minimum credit card payments. As long as you don’t add any more charges, and your interest rate remains fixed, it’s essential to create your own debt payoff strategy.

Start by reviewing the balance owed, the annual interest rate, and minimum monthly payment due on each of your credit cards. Then, rank how much each debt is costing you each month. Use that information, prioritize your credit card debts and layout a plan to pay them off.


Dumping your credit card debt may seem like too tall a mountain to climb, but with these steps, you’ll have a clear path to become credit card debt free.

Scroll to Top