Six Smart Ways to Pay Off Credit Card Debt

Sick and tired of making credit card payments that seem to go nowhere? Millions of people are dealing with the same problem. In fact, a survey from Freedom Debt Relief showed that 30 percent of Americans carried a credit card balance for six or more months during 2019.

If you’ve reached the end of your rope, then it’s time to learn some of the best ways to pay off credit card debt. The following tips and skills could help you get the extra cash you need to accelerate the debt payoff process.

1. Start selling everything

If you want to make a little extra money for a relatively low amount of effort, start by selling items you no longer use. Look around your house for clothes, appliances, electronics, and anything else you don’t need anymore—then sell them. There are a few ways to do this:

• Yard sales. A good old-fashioned yard sale could help you clear out unwanted items and make extra cash. To attract more buyers, advertise on Craigslist or NextDoor and other sites, post signage around your block, and check if your neighborhood does an annual yard sale so that you can jump on the bandwagon.

• Use a marketplace app. Letgo and Facebook Marketplace are two of the many apps you can use to post items you want to sell. The upside of these apps is that you cast a wider net than you would with a yard sale.

• Sell to second hand stores. Local second hand stores might buy your used clothing, jewelry, and other items. They could also help you sell it on consignment, but if they do they’ll take a cut of the profit.

Saying goodbye to unused items can be hard, but it’s one of the best ways to pay off credit card debt.

2. Pick up a side gig

Depending on your skill set, you could make hundreds of dollars every month by picking up a side gig. Here are some ideas on how to do it:

• Tutor or teach music lessons. Whether you have musical training or a good understanding of subjects like English, math, or science, you can use your knowledge to make some extra money. Post your services online, or ask your local schools or community colleges if you can advertise to their students.

• Freelance. If you have skills that you can market to businesses, freelancing is a great way to make some extra cash. Sites like Toptal, 99Designs, and Upwork are designed to connect companies to freelancers. Best of all, you can set your own prices and work as much or as little as you want.

• Sign up for odd job apps. If you own a truck that can haul large items, odd job apps like TaskRabbit could connect you to folks who need moving help. And if you’re just all-around handy, you can list your services on apps like Takl to make some extra money.

3. Increase your liquid cash flow

Sometimes having more money to pay off your debt is just a matter of adjusting the automatic withdrawals you have set up so that you have more money left over from your paycheck to use towards your debt. Here are some ways to pay off credit card debt by increasing your cash flow:

• Adjust your retirement contributions. It’s smart to save for retirement through your company’s 401(k) plan or another similar retirement plan. But if you’re in a pile of debt, you could decrease your contribution and apply that extra money toward your credit card bills.

• Change your tax withholdings. If you’re getting a large tax return each year, you may want to consider increasing your withholdings. It will reduce your yearly refund, but it will also give you more cash at the end of each pay period. Just make sure not to increase your withholdings too much.

• Switch insurance plans. If you found that you didn’t go to the doctor much in the past year and you aren’t planning any major procedures in the coming year, you could scale back your health, vision, or dental insurance to save more money each month.

4. Negotiate a pay increase

If you’ve taken on more responsibility at work lately and shown value at your company, you may want to consider asking for a pay increase or a promotion. These conversations can be tough, and everyone’s workplace is different—but there’s no harm in asking. Don’t be afraid to have an honest conversation with your boss, talk about your career goals, and ask for a wage that reflects your contributions.

5. Eliminate unneeded expenses

One of the best ways to pay off credit card debt is to free up extra cash by eliminating some of your day to day expenses. An easy way to do this is by separating “wants” from “needs”. Here’s how to do it:

1. Gather your bank statements and credit card bills.

2. Take a highlighter and highlight necessities, like food, water, gas, insurance, and other things you need to get through the day. These are your “needs”.

3. Next, take a highlighter of a different color and highlight all the things you spend money on but don’t actually need—these are your “wants”. They can include your subscription services, daily trips to the café, unneeded clothing or accessories, or video games.

4. Do you see a lot of “wants” highlighted in your statements? If so, that’s a good place to start cutting costs. You don’t need to cut everything—but you should seriously consider each unnecessary expense and make sure that it’s worth the cost.

5. Take all the cash that you save and put it towards your debt.

Separating wants from needs is a great way to save money, but if you want to maximize your savings and know exactly how much you can put towards your debt each month, you need a budget.

6. If all else fails, get professional help

If you’ve tried everything and you still can’t get a handle on your debt, you may want to consider professional help. Both credit counseling agencies and debt settlement companies may offer free consultations where you can discuss your debt situation and get help finding the right solution for you. A quick internet search should get you in touch with someone who could help.

You’re already on the right track just by reading this article and getting up to speed on the various ways to pay off credit card debt. Keep going, and your debt could be in your rearview mirror before you know it.

Be proactive with your finances and chart a bright future

Understanding how to pay down debt, manage money, and plan for the future shouldn’t be complicated, but you have to educate yourself. We’ve developed a simple-to-follow guide explaining best practices and tips to help you move toward a better financial future. Get started today by downloading our free guide.

Learn More

• 7 Smart Ways to Use Your Credit Cards in a Recession (Freedom Debt Relief)

• Unemployed? Here’s How to Keep Managing Your Credit Card Debt (Freedom Debt Relief)

• How to Use Credit Cards Wisely (Freedom Debt Relief)