How To Cut Credit Card Debt? 7 Easy Ways To Start Today

Credit Card Debt is a very common concern among the Americans who find themselves getting lost in the piles of unpaid bills. Millions of people are looking for the best way to pay off credit card debt. Some of them are mentally ready to make dramatic expenses cuts,  downsize their housing and drive an old used car until they are debt free.

What if deep inside you know you must do something to stop growing credit card debt, but it’s still hard for you to change the old habits at once?

In this post, I’ll discuss the reasons why people get into credit card debt and propose several simple ways how to start paying it off.

Any journey starts with the first steps in the right directions. A financial journey of paying off credit card debt and becoming financially independent is not any different.

Note: As an Amazon Associate, I earn from qualifying purchases.

Why Do People Get Into Credit Card Debt?

The main reason for getting into credit card debt is related to the consumption-focused culture around us, where the “living in debt is normal” myth became a sad reality.

Getting a credit card at a young age

A long time ago, getting a credit card became one of the signs of entering adulthood, similar to passing a driving test. Looks like every college freshman has a card, often before earning an independent income. Many young people start using credit cards without having a basic understanding of how they really work, especially if the parents pay for their expenses.

Unfortunately, not all schools have financial literacy as part of their mandatory curriculum. Students graduate high schools completely unaware of simple economic terms as the time value of money, interest rate, inflation etc. They don’t learn about the crucial importance of budgeting and savings.

Credit card companies try to attract teenagers by targeted advertisements, knowing that many people would stay loyal to their first credit card provider for many years. The legal age to apply for your own credit card was raised from 18 to 21 by Credit Card Accountability Responsibility and Disclosure Act of 2009. However, parents or guardians can make a minor an authorized user on their account, without minimal age threshold at some banks.

Tip: Teach your kids about money and budget before giving them a credit card.

Spending more with a credit card than with cash

It’s proven by research, that when using a credit card you spend more than with good old cash. Why?

First of all,  it’s just technically possible with the credit card. If you only have $50 in your wallet when you enter a supermarket, you won’t spend $60, as you simply can’t walk out without paying these extra $10 you don’t have. With plastic, it’s so easy to grab a few more items, swipe a card and hope to pay it off at some day.

There is also an emotional reason. Somehow, it’s not easy to let go of those green bills, it hurts much more than swiping a little plastic square and scribbling a signature. When buying with cash, you immediately know and feel the real cost of the item. The delay of credit card payment allows the shopper to focus on the benefit of the purchase and not on the cost. It’s called the coupling phenomenon.

Tip: Try doing at least a part of your shopping with cash. Set up a limit when you go to the grocery store, leave your credit cards at home and only take the cash you are planning to spend.

The culture of consumerism

The modern Western culture is too inclined to material values. We are taught that debt is just a tool to get things earlier than we can really afford them. It’s totally ok to buy a new TV and pay for it for the next 5 years. Everything must be the best and latest model, trendy and fashionable, otherwise, what will the Joneses think about you? That you can’t afford it? What a social disaster!

The idea of “I want it ALL and I want it NOW” is imprinted in our minds from a very young age. People are losing the ability of delayed gratification.

Remember the famous “marshmallow experiment” conducted at Stanford University in the 1960s? The children who were able to wait for 15 minutes to get two marshmallows instead of eating one immediately, demonstrated many advantages over their peers as teenagers and adults.

Watch this short video with cute kids trying not to eat their marshmallow. We have a lot to learn from them!

Credit cards make it much easier to get whatever you want NOW, without thinking about the consequences.

Maybe we should think about that marshmallow every time will pull a credit card out of the wallet to pay for the next whimsical purchase.

Tip: every time you are going to press the “Buy now” button or swipe your card at the register, count to 10 and ask yourself: “Do I absolutely need this? Can I do without it? Why am I buying it? Would I regret it on the day that the card payment is due?”. Remember the marshmallow!

The pursuit of comfort

Another reason for piling credit card debts is that nowadays, people are looking for maximum comfort at minimum effort. Ordering takeaway instead of cooking at home, riding Uber instead of walking – we value our time so much that we are willing to pay for outsourcing to save ourselves from undesirable tasks.

It’s so easy with all these apps on our smartphones. Click a button – and the dinner is on its way to you. You will pay for it later. For now, it’ll just add up to the credit card balance and accumulate interest.

Saving time and effort might be the right thing, if you use this spare time in a productive way – making money, learning, exercising. Watching a reality show from your couch doesn’t count.

Tip: before ordering a takeaway, check if you can make a meal with what you already have in your fridge. If you decided to order – do something meaningful with the time you saved.


Heavy promotions of credit cards

Wherever you go, there is a credit card offer waiting for you. Banks, big retailers, and wholesale clubs – everyone wants to lure you to add their credit card to your wallet. They promise you discounts, cashback, points and birthday presents. Just sign up for their card on the spot.

The more credit cards you have, the more difficult is to track them and the total outstanding balance. They can negatively impact your credit score if you forget to pay in time.

Tip: If you have several cards, use free Personal Capital software to monitor all the transactions in the same place.

Related post: The Best Free Personal Finance Software – Personal Capital Tool Review.


Why I Have Credit Cards But No Debt?

Russian wooden dollsMaybe I should consider myself lucky, as I grew up in Russia of the ’80s, where credit cards simply didn’t exist. An average employee lived from paycheck to paycheck. Few people managed to save some money for a pair of winter boots. It was not easy to overspend in stores, where the shelves were mostly empty.

In the ’90s, cash itself became a scarce resource. First of all, the Russian ruble was devaluated due to a lack of political and economic stability. Many public and private firms struggled to pay wages and came up with some creative barter deals. My mom was a software developer and could get eggs and chicken as part of her salary, after working on the automation of a large poultry farm.

When I moved to Israel, entered a university and got my first credit card, I treated it in the same way as cash. I simply was not really aware of an option not to pay for what I spent. More than that, I tried to save some money for a rainy day, as I was alone and couldn’t expect any help in case of emergency.

I studied at the university, worked as a waitress and cleaned houses. Going to a supermarket was too expensive for me at that time, so I went to a local market at the closing hours to get some discounted vegetables and baked goods.

Later on, my financial situation had improved, but the mindset of living below the means stays with me. I don’t buy anything I can’t pay in full right away, with the exception of a mortgage.

Do I have credit cards? Yes, three! I keep them because of the cashback points I get and the comfort of using them, compared to withdrawing and carrying cash.

Did I ever pay a penny of interest rate to a credit card company? No! My payments are automatically set up to pay the full balance every month.

I’m not trying to say I’m better than you. What I mean is that the environment you grow up in and your personal experience with money (or the lack of it) can play a big role in shaping your attitude toward credit cards and debts.

It’s not your fault that the pressure to spend and be in debt is everywhere so that having car payments and carrying credit card balances for years became the norm. Still, you can stop this dangerous cycle and change your behavior. It’s never too late.

Why you should get rid of the credit card debt ASAP?

Credit card companies charge outrageous interest rates on outstanding credit card debt. The range is from about 13% to 23%, depending on the card type and your creditworthiness.

With such high rates, you pay much more for any item compared to the cash price. Let’s say you bought a coat for $100 on Black Friday sale. If you don’t pay the credit card bill for a year, the real price of that coat will be $113 – $123. Not as cheap as you planned. Do you really want to spend your hard earned money funding the credit companies?

Paying tons of money as interest charges means that you are not able to spend it on other important things – healthier food, better house, family vacations – everyone has different goals and any goal is better than helping the banks to make higher profits.

Having the debt makes you more vulnerable to any negative event in your financial life, like losing a job, temporary disability, unexpected health expenses, emergency repairs to your house etc. Any major incident might leave you unable to make a required payment and set you on the edge of bankruptcy.

Carrying the debt has a substantial emotional impact, adding more stress to your already stressful life. It may contribute to the development of sleep and eating disorders, blood pressure issues and even heart problems.

Your health is more important than having the latest version of every gadget, fashionable clothes or a bigger car.

How To Start Paying Off Credit Card Debts?

Once you start rolling the balance, it gets harder and harder to repay. It grows like a snowball, but people find it easier to ignore the problem than to change their lifestyle and stop the shopping splurge.

First of all, admit that there is a problem and commit to resolving it. By doing this, you’ll be ahead of many other credit card debt slaves.

Next, get a full view of your financial situation and start making changes.

Get The Full Picture Of Your Finances

Before you make a plan on how to pay off your debt, I recommend that you get a holistic picture of your finances. It can be easily done with Personal Capital – free software that collects the information from all your accounts and allows constant monitoring of all transactions and balances.

It shows your net worth and helps you to plan for retirement. You can read my full Personal Capital review here. Don’t worry – it’s absolutely free.

The second step I recommend is checking your credit score. You can do it for free using Credit Sesame.

What Is The Best Way To Get Out Of Credit Card Debt?

I know it’s very hard to change old habits, so you might need a step-by-step guide that keeps you motivated. One great option is Dave Ramsey’s book “Total Financial Makeover”, where he teaches his methods of getting out of debt and becoming financially independent. It might be the best money spent in years!

Consider refinancing the debt

I would start with checking the option of consolidating some of the debts. I highly recommend Credible for refinancing credit card and student loans. Everyone’s situation is different, but it’s worth to check out if it’s possible to reduce the interest rate and monthly charges. Comparing prequalified refinancing rates with Credible will only take you a few minutes and wouldn’t affect your credit score. They guarantee the best rate for you. If you find a better rate elsewhere, Credible will give you $200.

However, be careful. Some of the student’s loans may have benefits you don’t want to lose, like lower interest rates or a possibility of loan forgiveness. You don’t want only to extend the loan period to get lower monthly payments. This is an illusion of a solution that in reality will make you pay more interest.

I would refinance only if the new loan interest is lower than the average rate of the loans you want to pay off with this new loan money.

After refinancing, keep thinking about the best way to reduce the debt balance.

There are several methods to pay off the debts when you have multiple accounts to cover. The most popular are the debt-snowball and the avalanche methods.

The debt snowball method

The debt snowball method suggests that you repay the debt with the smallest balance first. For example, if you have credit card debts of $1000 and $2000 and a student loan of $5000, you will repay the $1000 credit card debt first, then move to reduce the $2000 balance and the student loan will be the last.

This way you get rid of some debts from the list and it gives you a good feeling of progress towards financial freedom, as you see the number of bills going down. However, you’ll still accumulate high interest on the larger balances.

The avalanche method

The avalanche method is a debt reduction strategy, whereby you pay the accounts with the highest interest rates first, slowing down the accumulation of additional interest. By math definition, this is the quickest way to pay off the credit card debt, but if the balance of the account with the highest rate is one of the largest balances you have, the number of bills will stay the same for a long time and it will be hard to see the relief.

Which method to use depends on your mindset. If you are more of a practical person, like myself, you should go with the avalanche strategy. For more emotional types, who need to see results fast, it might be better to go with the debt snowball.

The easy way to save money

If you find it difficult to actively set money aside, try an automated tool. We live in the 21st century, aren’t we?

One of the easiest options to start saving without really feeling it is with Acorns.

This app has several ways to help you save money and start investing. One way is to link a credit card so Acorns will round up every transaction and put the difference in your investment account. For example, if your grocery bill is for $10.45, Acorns will round it up to $11 and move the $0.55 change to a saving account.

You also can set up an automated weekly or monthly contribution starting from $5. An additional way is to get cash back for shopping online with selected merchants (compare the rates first, as explained in the next section).

Usually, Acorns will invest the money according to your risk profile. You can choose conservative options and pull the money out after accumulating a substantial amount to reduce your credit card debt.

Related post: What Is Acorns Investment App? Review for 2019

Get Control Of Your Expenses – 7 Easy Steps To Start

I understand that making big changes can be very hard, but you can start with small steps, adding more every week. Here is the list of some good options to reduce the expenses:

#1. Start with your grocery bills. Learn how to buy only what you need (read my “Grocery shopping guide – Part I”) and how to pay less for it (here is the “Grocery shopping guide – Part II” to help with this).  Use the money-saving apps like Ibotta, Fetch Rewards, Saving Star and Coin Out.


#2. Get used to budgeting. It is crucial to understand your cash flow – how much money you get every month and what are the main expenses you must pay for. Prioritize your needs – from MUST (housing, commute, basic food, internet connection) and NICE TO HAVE (entertainment, lunch with coworkers) to LUXURY (new furniture, expensive vacations). If you are not a big fan of Excel spreadsheets – try a budgeting app. One of the most popular free options is Mint.

#3. Try the No-Spending Challenge – recently it gained popularity on social media where groups of people commit to stop spending on anything except absolutely necessary groceries or commute costs. No clothes, no gadgets, no furniture purchases. Live with what you already have. Prepare the meals from the items in your pantry. Set aside the money that you were tempted to spend but refrained from spending. Use it to repay the debt instead.

#4. Check all the subscriptions you might have and do not use. Negotiate the recurring bills, like utilities, cable TV, and mobile providers. Think about cutting or downgrading some of them. If you don’t have the time or don’t feel comfortable to negotiate, try the Trim application – they will do it for you based on a success fee, so you don’t have anything to lose anyway.

#5. Take the credit card out of your wallet (many people just cut the cards, but you can try leaving it at home) and use the “Envelops Method” – once you have a budget, pull the cash you plan to use during the next week and divide it to several envelops, like “Grocery”, “Transportation”, “Entertainment”. Only use the money from the related envelop when going shopping.

#6. If you must buy online, make sure you get the highest possible cash back. I recommend the TopCashback website as a starting point for any online shopping because they guarantee the best cashback rates.  Read my TopCashback review here.

#7. Use Paribus – the free app that tracks your online purchases and automatically gets you a refund if the price drops after the purchase within the price protection period. It also gets you refunds if Amazon Prime purchases are delivered later than promised. Read my Paribus review here.

These are not dramatic steps like selling the house or switching to an older and cheaper car, but they can give you a start and the motivation to move forward.

Final Thoughts

To tackle credit card debts, first of all, you should realize you have a problem, and that living in debt is not the only option and definitely not the right one.

There are two ways to find the resources to pay off the debts – create more income or cut the expenses.

Let’s start with a step in the right direction TODAY.


P.S. Do you have credit card debt? What is your plan for it? Share your tips or concerns in the comments below.

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7 easy steps to start paying off the debt




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My name is Mary and I'm the owner of MoCash For You.

19 thoughts on “How To Cut Credit Card Debt? 7 Easy Ways To Start Today

  • December 6, 2018 at 6:39 am

    I feel money matters need to be discussed more in the home and at school.
    I was listening to an audio book this week ’The Compound Effect’. It spoke about the compound effect on choices. A $4 cup of coffee every day for 20 years in $52,000, because it was not invested.
    Having accumulated debt I am using a combination of reducing spending and consolidation.
    I also encourage my children to only have debit cards.

    • December 6, 2018 at 8:41 am

      Hi Angie,
      I think of making some kind of mini financial literacy course to explain the basic things like the time value of money, compound interest, discounts, investments.
      Small expense of a couple of bucks that you repeat EVERY DAY adds up to huge amounts. That’s why I don’t care to pay a bit more for an item I buy once in 10 years, but I do care about the prices of grocery I buy every week.
      I’m glad you raise your kids to be smart. Sometimes it takes a generation to break a bad habit that became a norm
      Thank you for visiting

    • December 7, 2018 at 11:14 pm

      I used to have about $28k debts on my 3 credit cards. I used to always make my payments on time until I lost my previous job which increased the debts and affected my credit scores. So a financial expert helped me to clear my debts and repaired my credit within a few days.

  • December 5, 2018 at 6:00 pm

    Love the video! What a perfect example of delayed vs. immediate gratification. I told my youngest son who just graduated from high school that he should not get a credit card until he could maintain a positive balance in his checking account for many, many months. He took that to heart and is really trying to budget now.
    Thanks for the post!
    Mary Beth

    • December 5, 2018 at 9:34 pm

      Hi Mary,
      What a great educational example! It’s the parents’ responsibility to teach kids about money. Only better education can stop the snowball of the debts.
      Learning how to budget before college is a great life lesson.
      Thank you for sharing

  • December 5, 2018 at 5:27 pm

    Hi Mary,
    What a practical and helpful post. I don’t have any credit card debt at the moment. I too have the rule to pay the balance in full every month if I have made credit card purchases. I hate how there is pressure to put everything on credit without regard to the fact you’ll get stuck with high-interest rates if you don’t pay it off at the end of the month. It’s posts like yours that will help change the status quo.

    • December 5, 2018 at 9:32 pm

      Hi Yolanda,
      I’m glad you handle the cards the same way I do. I’m always horrified to hear things like that an average family has $42K credit card debt. It sounds just insane when you think of the amount of interest they pay. The money that could be used with much greater benefit to these families.
      If I help even one person to make one step out of this madness – I’ll be happy.

  • December 5, 2018 at 11:40 am

    Credit cards are definitely tricky! I have 2 right now that I need to work on but I’m in the process of doing so. I’m thinking that the tax return this year is primarily going to the credit cards. I had planned to pay off a medical bill but they don’t charge interest, so credit cards it is!

    • December 5, 2018 at 9:29 pm

      Hi Dawn,
      A small advice – check why you are going to have a tax return. Having it means that you lend your money to the government for zero interest rate, while you pay insane rates on your credit card debts. Try to plan your tax deductions during the year in such a way that you get about even at the return time.
      I hope you know that medical bills can affect your credit score, so be careful about them.

  • December 5, 2018 at 10:49 am

    Dealing with credit card debt seems to be a lesson most of us have to learn at some point. I was fortunate to own a home that could be refinanced to pay off my credit card debt. Now I just have my mortgage.

    • December 5, 2018 at 9:26 pm

      Hi Lidia,
      I understand your move as the interest rate is way lower on the mortgage, though some people would say never exchange unsecured debt with a secured one.
      Hope you wouldn’t need any tricks in the future.

  • December 5, 2018 at 10:44 am

    I love the snowball method, and hadn’t thought of that way before. When my husband and I were in quite a bit of credit card debt, we used the avalanche method, and finally dug ourselves out. We swear we’ll never get in that position ever again!

    • December 5, 2018 at 9:24 pm

      Hi Kristian,
      As a dry financial savvy, I’d always go for the highest rate first. But as such a person, I don’t have credit card debts at all 🙂
      I hope you’ll never need to choose a method again. Better stay away from debts altogether.

  • December 5, 2018 at 9:44 am

    I like the snowball method – those small rewards for paying the smaller card off first really help to inspire you going forward. Kind of like losing that first pound in a diet keeps making you want to keep going! Thanks for the info. Very informative article!

    • December 5, 2018 at 9:22 pm

      Hi Maria,
      The debt snowball is a good method for people who need motivation more than dry calculations. Crossing out paid bills is so satisfying, right?
      I hope you’ve found some additional useful ideas in my post.

  • December 5, 2018 at 9:39 am

    I pay cash or with my contactless debit card and keep the credit card hidden away. I’ve seen too many people get trapped. They are great when they’ve got 0% interest – that’s how we paid off our new kitchen. We kept moving the debt to a new card with 0% interest and cancelled the previous one straightaway.

    • December 5, 2018 at 9:19 pm

      Hi Elizabeth!
      You are right, credit cards can be a nasty trap! Be careful with these 0% cards as well. They are just waiting for your rainy day to bite you.

  • December 4, 2018 at 10:46 pm

    Credit cards can be the enemy for sure if not used right.

    It seems I’ve always been stuck in the credit card debt rut.

    But now I only have one and rarely use it and when I do I pay the balance in full every month as you do. You have the right idea and how credit cards should be used.

    For the first time in my life I am trying to earn an income online while I’m retired so I don’t ever fall into this situation ever again. You offer some very valid points so I’m going to bookmark your sight to have as a reference. Thank you so much for your advice!

    • December 4, 2018 at 11:09 pm

      Hi Rob,
      I’m so glad to hear you are on the right track now. Once you understand there is a problem in rolling the credit card balance and see how much money you waste on the interest payments, you can always find a way to stop this snowball.
      Thank you for your inputs.


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