Slow & Steady: How to Pay Off Credit Card Debt Bit by Bit

September 12, 2019

Having a lot of credit card debt can be, well, a lot.

When it comes to resolving it, your first instinct may be to do so all at once. You wouldn’t be wrong for thinking that way: many people will tell you that this is the best, if not only, way to pay off your credit card debt.

Sure, credit card debt paid off in one fell swoop may boost your credit score and help you avoid paying high interest ratesbut taking a slow and steady approach can be just as beneficial.

To learn how to pay off your credit card debt in 4 simple steps, keep on reading below.


What is credit card debt?

Before we dive into those aforementioned 4 steps, we should make sure we understand what credit card debt is through and through.

Unlike debit cards, which transfer money electronically from your checking account to other accounts, credit cards are essentially debt cards.

Like personal loans, they’re a way of borrowing money that you don’t presently have and that leave you “indebted” to a card lender. With credit limits set by these lenders, one or more cards in your possession will give you the ability to make more purchases. However, your lenders will expect you to pay back said purchases on every card you hold every month.

In other words, credit card debt occurs when you don’t pay back the money your card lenders loaned you. What you don’t pay will accrue interest until you fully resolve your total balance.


How to pay off credit card debt slowly

Sometimes, paying off your debt all at once isn’t possible. So why not take things slow and steady?

One popular way of doing this is the snowball method.

Metaphorically, snowballing describes the process of something starting small and then building upon itself, getting bigger and bigger over time. In terms of paying off your debt, that’s exactly what the snowball method has you do: pay off your credit card debts from the smallest to the largest.

Check out the snowball method’s steps below:


1. List Your Debts

To know which debts to pay off first, you have to know what exactly you’ll be paying. Arrange your debts from smallest to largest so you have a sense of where your money will be going. That said, don’t worry about each debt’s interest rates—focus on their principal balances instead.


2. Make Minimum Payments…

After listing your credit card debts out from smallest to largest, make sure you know what their minimum payments are. Throughout this entire process, make sure that you regularly make the minimum payment for each card except the one you’re targeting (see more below).


3. …Except on The Smallest Debt

The only debt you shouldn’t make a minimum payment on is your smallest one. Direct all of what you can responsibly spend towards paying it off. Remember to stay well within your financial means—you don’t want to have to dip into your emergency fund just to resolve your credit card debt. For some extra cash, try:

  • Avoiding credit cards altogether
  • Budgeting your income
  • Picking up another shift or job
  • Selling unwanted possessions


4. Resolve & Repeat

Keep paying off your smallest debt until you’ve resolved it completely. After that, repeat Steps 2 through 4 until you’ve successfully paid off all of your credit card debt.

And that’s all there is to it!

It’s easy to confuse the snowball method with the avalanche method (yes, they’re both a thing). While the first has you pay off your debts starting with the smallest balance, the second starts having you pay debts according to the highest interest rate charged to you.

Some say that the avalanche method can save you more money—but research has shown that paying off smaller debts first increases your motivation and overall success.

No matter how you decide to pay off your debt, remember this: do what’s best for you. It’s your debt, your finances, and it’s your choice.


Need more financial relief?

While you should never take out a personal loan when you still have debts to pay, we’ve got your back if you need some extra cash. Check out what Illinois Lending is all about by reading more of our blog and visiting our website.

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