3 Ways to Approach Your Mother of a Credit Card Debt

Okay. So you have some credit card debt.

Erm...maybe it's A LOT of credit card debt.

And you're probably thinking: How the f%&kka$lk!* do I deal with it?

It's okay. Take a deep breath. The good news is that paying off credit card debt doesn't have to be difficult. However, if your strategy is just to pay the minimum due each month, you're probably only going to end up paying the interest you accrued that month, and NOT actually pay off your debt. Womp-womp.

In order to make a dent in your debt you are going to need to pay off as much principal as possible each month. Let's go though some methods to make your plan a success:

Consolidating your credit card debt

If you have several credit cards that you need to pay for every month, a good idea might be to consolidate that debt into a single monthly payment by transferring the balances of the different credit cards to a new single credit card that has a 0% or very low introductory interest rate in comparison to your current interest rates. Having a 0% or very low interest rate will give you the opportunity to pay more towards the principal balance than towards interest each month.

Call your credit card company and see if they'll work with you to open a new card with 0% introductory rate. If they won't work with you, find another bank. Be methodical in your ways, don't go opening 10 different accounts — just one with a lower rate than you've got and an available balance big enough to cover your damages.

One thing to keep in mind however is that these low interest rates usually only apply for a fixed amount of time, so consolidating your debt only makes sense if you can pay it off before the introductory rate expires.

You also want to make sure you read the fine print so you are aware of any fees associated with the balance transfer because sometimes, despite the low interest rate if the fees are too high then you might not be saving any more by consolidating your debt.

Paying the smallest balance first AKA the debt snowball method

Another debt payoff strategy if you have multiple credit cards is the debt snowball method, where you focus on paying off the credit card with the smallest balance first regardless of interest rate.

This method requires that you pay as much as you can towards that smallest balance, while paying the minimum payment on the larger debts.

Once the smallest balance is gone, you will then take that payment and combine it with the minimum payment on the next smallest balance and so on, until you are making a giant snowball payment against your largest debt.

Paying the highest interest rates first

Another strategy is to pay off your credit cards with the highest interest rates first regardless of the principal balance. This strategy saves you more money over the long run when it comes to interest payments because the lower your balance becomes each month, the less interest you'll have to pay on it.

Once you're done paying off the credit card with the highest balance, rinse and repeat for the second highest until you are able to pay off all your debt.

The most important thing when it comes to paying off your debt is to pick one strategy, be consistent with it, and put as much money as you can each month towards paying your debt down.