Did you know that so far in 2024, Americans are carrying $1.142 trillion in credit card debt? That figure is nearly $215 billion higher from the record set in the fourth quarter of 2019. And where we expected to see a downturn in the first quarter of 2023, it didn’t happen this year. Turns out, people are getting into more credit card debt after all.

Credit card debt can be a tough rock to get out from under, but never fear — by formulating a plan with tried-and-true strategies and sticking with it, you can lower your credit card balance, improve your credit score, and ultimately dig yourself out of debt.

The number one reason to get out of credit card debt

Purchasing goods and services with a credit card is certainly convenient — especially in this day and age. Stores offer their own credit cards with specific cardholder perks, and you can even earn cash back or receive discounts to buy something you really want. However, high interest rates can spell disaster — if you don’t pay your balance off in a timely fashion, you can accrue some serious interest payments.

Interest is essentially what you’ll pay the credit card company for fronting you the money. You can think of your credit card as a loan, to which you’ll owe the principal balance plus the percentage of interest agreed upon during signup.

If your credit score isn’t as high as you’d like, you can still qualify for credit cards — but beware high interest rates. Lenders will view borrowers with lower credit scores as a risk, especially with unsecured debts like credit cards, which can put you in the path of 20%+ rates!

By getting out of credit card debt, you can stop paying interest on the balance you owe. Did you know that if you continued to pay a minimum monthly payment of $1,000 on a $20,000 loan at, say, 29.99%, it would take you over two years to clear that debt — with a hefty $8,066.78 going into your lender’s pocket?

We’ll take a look at the same loan again with the same terms — but this time, we’ve been graced with a 5% APR. It would take you 1.7 years to pay off the debt, but this time only $926 toward interest.

The bottom line? Get out of credit card debt to stop paying interest!

How to get out of credit card debt

So, are you ready to stop paying interest to your lenders, improve your credit score, and make your credit card debt a thing of the past? With some perseverance, patience, and these tips below, you can start to ease your way out of credit card debt.

Organize your credit card debt

Open a spreadsheet and start by entering every open line of credit you have — these can be big-box retailer store credit cards, cards from traditional lending or banking institutions, and cards from credit unions. List each account, line by line, and include your outstanding balance, minimum payment, APR percentage, and the payment due date.

Pick a debt pay-down strategy

Seeing your balances and due dates all in one place can be scary — don’t worry. Rome wasn’t built in a day, and your credit card balances won’t be paid overnight, either. There are a few pay-down strategies that you can use to keep you on track and begin chipping away at your repayment.

Debt snowball method

The debt snowball method entails finding your smallest debt and paying that first. Take a look at your list of credit cards and find the account with the lowest balance. Next, continue with your minimum monthly payments as normal, but instead of making the minimum payment on your lowest, you’ll pay as much as you can afford — this is where budgeting comes in handy.

Once you pay off your first outstanding balance, you’ll continue rolling over the payments on the next smallest debt — this is how you create a “snowball” and start paying down your credit cards. The advantage to the debt snowball method is that you’ll get a quick win paying off your lowest balance, in turn keeping you motivated to continue!

Need a hand getting your budget squared away? Take a look at how Quicken Simplifi can help.

Debt avalanche method

The debt snowball method is the polar opposite (ha, see what we did there?) of the debt avalanche method, in which you take on your highest interest rates first. Go back to your handy spreadsheet, where you will need to identify your credit card with the highest APR percent. The rest follows the same as the debt snowball — pay your minimums across the board, but allocate as much as you possibly can for your balance with the highest interest rate.

The debt avalanche is great because it immediately helps alleviate the strain of high interest. As your balance decreases, your accrued interest per month will decrease, and you’ll ultimately reach the payoff point.

If you use the debt avalanche method, please remember to be patient and to stick with it — you won’t pay off your credit card debt overnight, but you will save exponentially on interest!

Using the 50-30-20 rule

While not solely a debt paydown strategy, the 50-30-20 budgeting method can be extremely helpful in credit card repayment and lowering your balances. The figures refer to the allocation of your income after tax — 50% goes toward needs, 30% toward wants, and 20% toward debt repayment.

The 50-30-20 can definitely help you pay back your outstanding balance, but it takes discipline. It’s very important to be real with yourself and be realistic about your ability to commit 20% of your income toward debt repayment. If you’ve historically been less-than-discerning about your discretionary spending, maybe this particular method isn’t best for you.

Explore debt consolidation

Debt consolidation can offer relief if you’re carrying multiple balances with high interest rates. One option you may consider is a balance transfer credit card, which will allow you to transfer your balance to a singular card with an introductory 0% APR for a limited time.

This option may not be the best for those with very high balances, and they will generally come with a hard inquiry — this can affect your credit score.

You may also qualify for a debt consolidation loan, which is a type of personal loan meant for debt repayment. These loans will generally have a fixed interest rate, but it will be at a lower percentage than your credit card interest.

By using a debt consolidation loan, you can pay off your credit card debt — but make sure you don’t start using the available credit!

Stick to your plan

Let’s be frank — a great credit card repayment plan is not helpful if it’s not consistently followed. If you’re serious about getting out of credit card debt, you need to make sure you stick to your plan. Above all, it’s important to be honest with yourself, commit to your plan 100%, and look toward the future optimistically. It can seem impossible, but it’s not — you can do it!

Tips to stay on track

So, you’ve got your plan fully formulated, and you’re ready to build your credit score and stop paying interest? Here are a few more tips to help you cross that finish line and step into debt-free living.

Audit bills and subscriptions

Do you use your partner’s Netflix login? Maybe you have an old GQ subscription that somehow finds its way into your recycling every month? Take a look at what you’re spending on bills and subscriptions — streaming services, magazines and newspapers, and apps can all be set for auto-pay, and we don’t even notice the transactions!

By using an app like Quicken Simplifi, you can see when your bills and subscriptions are due, how much they’re costing you, and decide if they’re worth keeping — you can get rid of ones you aren’t using and snowball that balance into debt repayment.

Put on your chef hat

After a long day, cooking can seem like the least desirable prospect possible — GrubHub, DoorDash, and Uber Eats only require you to get off the couch. While the extra effort into cooking at home can seem like a reach when you’re already tired, it saves so much money. With surcharges related to gas price increases, tips, and delivery fees, you’re really throwing money out the window.

It’s a nice treat to splurge on for an occasional indulgence, but you can eat cheaper (and healthier!) by donning the apron and channeling your inner Gordon in your own kitchen. Who knows, maybe you’ll find your new passion?

Create a budget

As we discussed above, creating a budget and adhering to it is paramount. By monitoring your after-tax income, your bills and financial obligations, and your savings goals, you can stick to a system that works for you and not spend outside your means.

Consider using Quicken Simplifi or Quicken Classic to organize and view your finances — they can monitor your balances across bank accounts and credit cards, alert you to upcoming bills, help you set a budget, and even monitor investments.

Have you ever wondered how you could make some extra cash — and quick? Take a look at our guide here.

Automate your payments

Do you find yourself forgetting to make your payments on your outstanding balances? Sometimes these missed payments can even result in late fees — just one more avenue by which your money leaves your account! Consider automating your payments, which can help you to ensure you always pay your bills on time. Certain institutions can even offer perks for signing up for automatic payments — take a look and see what options your lenders have made available to you.

Only spend what you have

Above all, you need to ensure that you’re only spending money you actually have! Try to stick to spending with your debit card or out of your checking account. By avoiding putting a balance on your credit accounts, you can safeguard yourself from running up your balance again.

Make credit card debt a thing of the past

Credit card debt is no joke — it can follow you around for years, causing you to shell out tons of hard-earned cash toward interest rates that can feel insurmountable. If you’re feeling the strain of outstanding credit card balances and a suffering credit score, use the tips above as a game plan to pay your way out.

Trust the process, be patient with yourself, and stick to your strategy, and you can work your way to financial freedom, rebuild your credit score, and stop shelling out interest to your lenders.