By Jason Steele


5 Min. To Read

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Issue # 6 of the Credit Card Reviews Industry Roundup covers paying off credit card debt. Credit Card Expert Jason Steele asks the participants this week:

What are the most effective ways to pay off credit card debt?

This week we have Susan Johnson Taylor, Louis DeNicola, Robert Harrow, Ben Luthi, Miranda Marquit, and Holly Johnson contributing:

Susan Johnston Taylor - Covers money and credit cards for,,, and U.S. News & World Report.

Paying off credit card debts isn't a one-size-fits-all proposition, but I'm a fan of making small micro-payments on your credit cards, especially if you freelance or have side-hustle income. If you get a freelance check or a payout from your Etsy shop or something, you'd put all or part of that money towards your credit card immediately rather than waiting until the credit card due date and possibly frittering away that money in the interim.

This is a smart strategy for someone who carries a balance or someone who tries to pay it off each month. Making more frequent credit card payments rather than waiting until your payment due date helps lower your balance and benefits your credit score because 30% of your FICO score is based on the amounts owed (so using more than 30% of your available credit is considered high utilization and could ding your credit score). Psychologically, it also helps reduce the stress of seeing a bigger balance each month and gets you into a habit of making regular payments. I think you're also less likely to miss a payment if you're constantly chipping away at the balance instead of paying it once a month.

Louis DeNicola - Personal finance writer who works with Fortune 500 financial services firms, FinTech startups, and non-profits to help promote financial literacy.

Knowing where you stand can be really helpful when you're making a plan to pay off debt. Make a list of all your debts, not just your credit card debts, and try to figure out how much you owe, the minimum monthly payment, and the interest rate on each account. From there, you could decide to pay off the debts with the highest interest rate first. Or, you may want to quickly knock out a few of the lower-balance accounts.

Moving your credit card debt to a balance transfer credit card with a 0 percent introductory APR could also help you save on interest. However, the tactic can backfire if you don't make a plan, and more importantly stick to it, for how you'll pay off the debt before the introductory period ends. Also, look to see if the balance transfer card has a balance transfer fee. Many cards charge 3 to 5 percent of the amount transferred, and you may want to calculate and see if paying the fee will cost more or less than you could save in interest.

Robert Harrow - Product Manager in charge of the credit cards vertical at Value Penguin

First, you need to figure out your budget. Every effective method for paying off credit card debt begins with an introspective look at your finances. Sit down and take time to figure out where your money is going. Look for things in your budget that you can cut out, and use all available funds towards credit card payments.

Once you know how much you can dedicate towards monthly payments, use an online credit card debt calculator to figure out how long it will take for you to pay off your debt at the current pace.

Use this information to match yourself with a balance transfer credit card. These are special credit cards that provide 0% APR on balance transferred to them, for some promotional length of time (usually between 12 and 18 months). Knowing how much time you need to get rid of your debt can help when choosing the right card.

Know that you, usually, cannot transfer debt between cards of the same bank. For example, if you have card debt with Citibank, you will need to find a balance transfer credit card from another issuer, like Chase or Capital One.

Things aren’t over once you transfer your balance. The next step is the most crucial. Now you need focus on paying down your debt. Stick to the budget you outlined in the first step. When we buy ourselves extra time, many of us have a naturally tendency to put off whatever it is we need to do. Think back to school. When a teacher or professor extended a deadline, most of us would end up waiting to the night before the new deadline to start preparing. Back then, the consequence was a bad grade. Now, it’s having to pay hundreds of dollars as interest. If you want to be rid of your credit card debt, it’s crucial to resist this urge delay, and remain committed to slowing paying down your bills.

Ben Luthi - Credit card expert and personal finance writer

If your ultimate goal is to save money and you have good or excellent credit, a balance transfer credit card is your best option. Depending on which card you use, you could get up to 21 months to pay off your debt interest free. There are a few things to keep in mind, though:

-There's no guarantee that you'll get a high enough credit limit on your new card to cover your full balance.

-Many balance transfer cards charge a balance transfer fee — often between 3% and 5% of the transferred amount. That said, some waive the upfront fee.

-If transferring the debt to a new credit card increases your credit utilization, it could hurt your credit.

-You do transfers with the same bank. So, if you have a Chase card, you can't transfer your balance to another Chase card.

Another good option to consolidate your debt is a personal loan. It's not an interest-free solution like a balance transfer card, but you'll have a defined repayment period, which can help if you're worried about not being disciplined with your payoff plan.

You can get approved for a personal loan if your credit isn't good or excellent, but you'll want to make sure that the interest rate is lower than what you're paying on your credit card. Some personal loan companies allow you to see rates before you officially apply, so try that out to get an idea of what you might qualify for.

Miranda Marquit - Nationally-recognized financial expert. Founder of Planting Money Seeds.

The best place to start is with your priorities. Look at where your money is going, and figure out which things aren't helping you achieve your financial goals. Cut those things from your monthly budget and earmark those savings for debt reduction. When you understand your priorities, values, and goals, it's easier to see how credit card debt is holding you back — and it's easier to stop spending on things that don't matter and use the money to free you from debt.

Once that's done, figure out what kind of plan you are likely to stick to as you pay down debt. The debt snowball, debt avalanche, and debt snowflaking are all different strategies that you can choose from. Decide which you are likely to stick with. Yes, you might end up taking longer and paying a little more with the debt snowball than you would with the debt avalanche, but, the most important thing is that you move forward and make progress. So choose a plan that you know you can stick to.

Holly Johnson - Owner of Club Thrifty and Travel Blue Book.

In my opinion, the most effective way to pay off credit card debt is with a zero-sum budget. A zero-sum budget forces you to plan your spending based on last month's income instead of income projections. From there, you give each dollar a job and plan out how to spend every dollar you earn.

Planning every dollar of your spending is advantageous for a few reasons. First, budgeting your money forces you to be intentional with your spending. Second, giving each dollar you earn a job forces you to reduce wasteful spending and get more of your dollars working in your favor.

Many years ago, my husband and I used zero-sum budgeting to pay off around $50,000 in car loans and student loans. We think this type of budgeting works best because it gets you in the habit of looking at your spending and figuring out way to optimize each month. With zero-sum budgeting on our side, we were able to find ways to cut our spending so we could throw more money toward our bills and get out of debt faster.


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