Tucsonans are using credit cards more than ever with everything becoming more expensive, it’s easy to understand why. If you’ve run into trouble, you can choose a strategy to pay off your cards that fits your personality and situation best.

First, make a plan to know how much money you can use to pay the bills every month. Write down all your credit cards, how much money you owe, and the extra amount you need to pay because of the interest rate. This will help you see the real numbers and make a plan to pay off your debt.

For example, let’s say you have $200 each month to pay off these credit card bills:

→ You owe $2,000 with a 16% interest rate, and the smallest payment is $40.

→ You owe $3,000 with a 20% interest rate, and the smallest payment is $60.

→ You owe $1,500 with an 18% interest rate, and the smallest payment is $30 

Now, you should set up automatic payments for the smallest amount you owe on all the credit cards except for one. For that one card, you should pay more than the smallest amount. There are four different ways to do this, and you can choose the one that works best for you. 

1. The Avalanche Strategy

The Avalanche Strategy focuses on tackling the credit card with the highest interest rate first. By doing this, you’ll save money on interest payments in the long run. List all your credit card debts from the highest to the lowest interest rate. Continue making the minimum payments on all your cards, but allocate any extra funds towards the card with the highest interest rate. Once that balance is paid off, move on to the card with the next highest rate. Repeat this process until all your debts are cleared.

2. The Snowball Strategy

The Snowball Strategy takes a different approach, targeting the credit card with the smallest balance first. This method provides a psychological boost, as you’ll experience small victories and build momentum as you pay off each card. Arrange your credit card debts from the smallest to the largest balance. Make minimum payments on all cards, but focus any additional funds on the card with the smallest balance. Once that card is paid off, move on to the next smallest balance. Continue this process until you’re debt-free.

3. The Pain Point Strategy

The Pain Point Strategy is all about identifying the aspects of your credit card debt that cause you the most stress or discomfort. This could be a high-interest card, a card with a large balance, or a card from a financial institution that you’ve had negative experiences with. By focusing on paying off the debt that bothers you the most, you’ll experience a sense of relief and motivation to continue working towards a debt-free life. Determine which card causes you the most stress and make it your priority to pay off that balance first. 

4. The Transfer Strategy

The Transfer Strategy involves consolidating your credit card debt by transferring your balances to a card with a lower interest rate or introductory rate. This can save you money on interest payments, making it easier to pay off your debt faster. Before using this strategy, ensure that you have a plan in place to pay off the transferred balance before the promotional rate expires, as the interest rate could increase significantly after the introductory period. 

Credit card debt doesn’t have to be a lifelong burden. By implementing one or a combination of these four strategies – the Avalanche Strategy, the Snowball Strategy, the Pain Point Strategy, and the Transfer Strategy -, you can tackle your debt and achieve financial freedom. Remember, the most important aspect of any debt repayment plan is consistency and commitment. Choose the strategy that resonates with you the most and start your journey towards a debt-free life today.