How to Pay off Credit Cards & Debt

Learn the most efficient way to pay off credit cards and debt

Some college students fall into credit card debt, feel guilty and worry all the time about money and their debt. College students have enough to worry about and shouldn't be worrying about debt. Find out the quickest and most efficient way to pay off credit cards with our credit card tips and resources below.

Note: These are just suggestions and tips from other college students who have had previous credit card payoff and debt issues. You should always consult a finanical professional before making any finanical decisions, and these tips in no way replace the need for a financial professional.

How Much Credit Card Debt Do You Have?

The first thing to do is to get out all (if more than one) of your credit card statements and figure out how much credit card debt you have. If you only have one credit card it can be easier than if you have multiple cards.

Stop Using Credit Cards

Now you need to stop using credit cards, which can be tough, but you can always leave your credit cards at home so you are not tempted to rack up more debt.

How to Pay off one Credit Card

Try to budget yourself and pay as much as you can on your credit card each month. Anything over the minimum payment is better than making the minimum payment, but the more you can pay over the minimum the better because it pays off the balance, where a portion of the minimum payment only pays the interest.

Reward Yourself When Paying off Credit Card Debt

The problem with paying off credit card debt is that it can seem like you are paying all this money and you are not getting anything for it. Try to build in incentives for yourself such as after you pay off 50% of your debt, you will then save money for something you really want, and then after you purchase that item (with cash) resume paying off your debt, and do the same once all off your credit card debt is paid off.

More Than One Credit Card

If you have more than one credit card, paying off your credit cards can be a bit tougher, you need to figure out the most efficent way to pay off your credit cards so your debt is paid off as fast as possible. Use a spreadsheet (create on by hand, or download one such as the Debt Reduction Calculator for Excel) to enter in the balance, interest rate, and minimum monthly payment for each card. Once you have this information sort your credit cards by the interest rate (highest to lowest).

Pay off credit card debt strategies

CNN Money Pay Off Credit Card Tool

Pay Off High Interest Credit Cards First

Pay off the credit card with the higest interest rate first, is the most widely accepted way to efficeintly pay off credit card debt. This can be accomplished by making only the minimum payments on all of your other cards, and then pay as much as you can on the card with the highest rate. After the first card is payed off, start making the largest payment on the credit card with the next highest interest rate, and so on until all cards are paid off. This payment plan when used properly can help you pay off debt quickly, and you will see after you pay off your first credit card you are really paying alot towards the next card because you no longer have to make minimum payments on the first card (you just paid off). This will ensure you will get the most bang for your buck when paying off debt. The CNNMoney.com Debt Reduction Planner tool is very helpful to visualize how this works.

Snowball Payoff Method

While not as widely accepted, some suggest to pay off the credit card with the least balance first, so you get that sense of accomplishment quicker, and then you can divert extra money towards the next credit card.

Don't Sign Up For Any Additional Credit Cards

Another option is to apply for a new college student credit card and balance transfer your balance over to the lower rate card. This could work for college students with lots of self discipline, but the tendency is to transfer the balance and then rack up even more debt on both cards. The plan is to pay off debt, not increase it so be careful.

Pay Off Credit Cards & Debt Resources

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