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how to pay off credit card debt

How To Pay Off Credit Card Debt

Credit card debt can be crippling. A loan shark is the only place to get such high-interest charges. We’ll show you how to pay off credit card debt.

I have been in credit card debt since I was 18 years old. As of 2013, I have paid them all off. I read so many books and blogs about how to do it, but the most important tip was JUST GET STARTED. Here’s how I did it, and how you will too.

1. Make A List of All Your Credit Cards

I had a white board hung up in my office where I created this list. If you don’t have an office or a whiteboard, you can use a sheet of paper and stick it on your fridge. You want to keep this list in front of you at all times. You’ll want to constantly be reminded that, yes, you do in fact have a problem that needs to be taken care of.

The list should include every credit card, the balance, the payment due dates, and the annual interest rate. The list should be in order with the highest interest credit card first.


There are two schools of thought on how best to pay off debt, but I will only recommend one of them. The first way to list out your debt is in order from lowest balance to highest, meaning you could pay off the card with the lowest balance first. This is a mental thing. The idea here is that by paying off the easiest card, you’ll feel like a winner and continue to pay off the rest. This is not the route I recommend.

The other school of thought, and the one I used to beat my debt is to pay off the card with the highest interest rate first. Here’s why:

Let’s say you have a credit card with a 22% interest rate like I did. If you racked up $10,000 of debt on that card, you are paying an extra $2,200 a year to have that balance, which when broken down monthly, would be about $183 a month added to your debt.  You want to pay this debt down as quick as possible so that you’re not giving the credit card companies money that isn’t helping you pay off your card any faster.

2. Create a Mint.com Account

Now that you have your written list, I also recommend you set up a Mint account so you can see your progress every day.


Mint is free online software that tracks your entire financial profile. You can enter in all your credit cards and it automatically pulls data from those credit card companies and shows you an overview of your debit in a big fat negative number. Your goal is to get this number to $0.00.

And don’t worry about giving your information to Mint. It’s just data. There is no way a hacker can gain access to your credit card information. You can also add in your car loan, mortgage, and bank accounts, which I recommend you do as well.

If you have a smartphone, download the app so you can check it every single morning to see what shape you’re in financially. This was a huge help for me and kept me on track. It’s sort of like a game, where your goal is to get that number to 0.

3. Ask For Lower Interest Rates

This is pretty fun and very motivational. You are going to call each credit card company and ask them to lower your interest rate.

When you call, you need to be confident. Do not show weakness here, it’s important. Your goal is to get your interest rate lowered by any amount they will offer. If they ask you why you want it lowered, say it’s too high — that’s it!

If they ask what you want it to be lowered to, say, “As low as you can.”

You can also threaten them. If you’ve been a good customer of theirs for a long time, and you have the ability to transfer the balance to another credit card, throw that in their face. You can threaten to leave. Trust me, if you’re in debt, they want to keep you as a customer since they are making money off you every single month.

You might not be successful with all of them, but keep trying. This will not hurt your credit either. The biggest thing hurting your credit score right now is your debt ratio: the balance vs. the credit limit. Yes, by paying off your credit cards, you will improve your credit score.

NOTE: Just because I told you to threaten the credit card companies with a balance transfer does not mean you should do a transfer. A lot of credit card companies want your business because you have debt. Debt is valuable to them because if you don’t pay it off, they make money off you from the interest you pay. You probably get a lot of offers in the mail stating that you can do a balance transfer to a new card with no interest for six months or a year. Avoid this!

The goal is to get rid of debt and minimize how many cards you have. Opening up another account is a bad idea. For one, you’ll be tempted to rack up debt with the new card. Two, you’re credit score could get hit for opening another card when you already have debt on your hands.

Remember, credit card companies are the enemy right now. Once you get rid of your debt, you are going to play them like a fiddle and take advantage of them.

Here’s a bit of info that might put things into perspective…

In the credit card industry, do you know what they call customers who pay off their credit card debt in full every month? Deadbeats! That’s right, people who use credit cards correctly are the worst customers for them because they make NO money off those people. Instead, we just take and use all the points they give us. Yea, bitch!

4. Start Paying Off Your Credit Cards

Now you have your written list and your up-to-date Mint profile, so now it’s time to start paying.

You’ll start by paying the minimum balance on all your credit cards except the one with the highest interest. What you’re doing is keeping the other credit cards waiting until you pay off the big one first. By paying the minimum on time every month, they’ll be waiting for you. I highly recommend you make these payments automatic, so you don’t have to think about them.

To make your minimum payments automatic, you can either set up automatic bill pay with your checking account or use the online credit card accounts themselves. I find it easier to do automatic bill pay through your bank so that you can set them all up in one place.

Once you have them all set up and automatically taken care of, you are going to throw everything you can afford at the highest interest credit card until it’s completely paid off, and I mean that. Connect your highest APR CC to Debitize, set it up on Debt Destroyer, and set up automatic min payments on your other cards. Then, when debitize pays it off, move next higher APR card to Debitize.

NOTE: If you’re worried about canceling your card because you heard it could affect your credit, you need to STOP worrying. Again, this is small potatoes compared to your debt ratio. Do not worry about your credit score. When you have no debt, you will never worry about this number again.

5. Finding Extra Money To Pay Off Your Credit Card Debt

The way I quickly paid off my debt was by working on the side and reevaluating my expenses. For one, I was spending $150 a month on cable TV. So, I tried only watching Netflix for a month, and I was fine. I used the extra $100 a month I was saving to pay off my credit cards.

I got rid of my very expensive BMW, which costs a lot of money in gas too. I traded it in for a Honda Civic. I was able to cut my gas expenses in half. I went from spending $60 a week to $30 a week. That’s another $120 that went to my high-interest credit card every month.

I also sold a bunch of shit on eBay and Craigslist. I used eBay for stuff I could easily ship, and Craigslist for big items. I took inventory of all my stuff. If I hadn’t used an item in a year, I sold it. All that extra cash went towards my big credit card.

I started doing side-work too. I have website design skills, so I got in my Honda Civic and drove around to a bunch of small businesses looking for work. I was able to sign two clients in one week.

All of these things combined allowed me to pay off my big credit card in less than three months. I’m asking you to get creative here.

The good news is, once you have a credit card paid off, it makes it a whole lot easier to pay off the other ones because now you have once less card to pay off, but that doesn’t mean you slack. Move on to the next credit card and do EVERYTHING you can to pay it off as quickly as possible. Look for ways to make quick money by selling your shit, or working a side job.

In fact, it’s a good idea to make a list of ways you can make extra money, even if it’s only temporary.

Get Started!

The biggest hurdle you need to get over is YOU. Every day you don’t start, is another day the credit card companies are taking your money.

I will tell you this, paying off credit card debt was a very emotional day for me — yes, that means I teared up a little. The relief was so overwhelming and gratifying that I cried tears of joy. The biggest weight in the world was lifted from my shoulders, and I felt like a new man. I felt rich because all of the sudden I had so much more money to spend on stuff I enjoy, however, I never got cable TV back. I’m officially a Netflix and Hulu guy.

This project also helped me to launch my business of blogging and making websites. I got rid of a lot of stuff I didn’t need anymore, and my house had never been cleaner. So much good came out of it, and I hope that it encourages you to do the same.

In fact, I’d love to know how you’re doing and if there’s any way I can help you achieve your goal of getting out of debt. You can ask me questions or share your successes in the comments below. I’m always replying.

Good luck!

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  • Eric Montas

    Matt, when I had to start saving for a house, my mortgage broker told me I had to be boring. So, I did. Being boring was easy. I ate at home for the most part, watched tv, played video games and hung out with friends at my place or theirs. I went from $5,000 in savings to $20,000 in 18 months. It was ridiculously easy. During that time, I also reduced my credit card debt to zero, and I learned to buy little with them, which made it easy to pay off my balance every month.

    Cut to three years later: I make a little more money now, and my spending has gotten a little out of control. I have to get boring again, but this time to pay off my credit card debt. I’ve done it before, so I know I can do it again. I just have to be boring for at least six months to start the year. I can do it, then keep on doing it, so I put the savings into my nest egg and Betterment investments.

    • Matt Giovanisci

      You know what, Eric…being boring is ok. But you really weren’t boring. What is boring anyway? Does boring me to don’t go out to bars, get shitfaced, and rack up hundreds on your credit card? If so, then I’m a pretty boring dude myself.

      The worst feeling in the world is waking up from a hangover and regretting every financial decision you made the night before. I’d like to avoid that.

      There’s nothing wrong with hanging out with friends in the comfort of a home. The beer flows, and yet, it’s cheaper. The laughter echos, and yet, it’s not annoying the REALLY boring guy at the booth next to you.

      Being boring is OK, if you think being financially stable is. I’d rather be boring with less stress, then…well, then not boring I guess.

      Good work on your progress in the past, and I wish you continued success in the future. Remember, we’re here to help :-)

      • The thing is, you don’t even have to be “boring” to save money and get out of debt. You just have to get out of lifestyle that involved spending lots of money to have fun.

        Hiking is free. Biking is free once you have a bike. Going to movies is cheap if you do matinees. Volunteering is free and gets you out in the community.

        In fact, I’ve always held the opinion that spending a ton of money on fun is a good indicator that you’ve actually BECOME boring. I’ve noticed it in myself; when I start looking to buy lots of stuff, it’s usually because I’ve lost focus on cool projects I was working on – projects that require lots of time and energy, but usually not a ton of money.

        • Dude, I absolutely resonate with that. One of the most fun summer days I had last year was renting a bike with my wife, my sister and our friends and biking up the west side of Manhattan. It cost us like $20/person, we brought our own booze and had a secret booze picnic in a park.

          It’s actually a great point you bring up about spending and becoming boring. I LOVE eating out and having fancy cocktails but I find that I partake much more often when I’m reaching for ideas on how to spend an evening. Best investment this summer was in a grill so we can keep the party local and well priced.

  • Johnny Horta

    Matt, Why wouldn’t you include your car loan in your debt pay off? I would think depending on how long those 0% cards are for, your could continue paying the min while really attacking your car loan. This is assuming your car is financed at greater than 0%. You could argue because it is backed by an asset, but if you plan on keeping it the math would say to pay that off prior paying down the 0%. I know this article is about CC debt but all debt should have been included. It seems to me that you want to get that car paid for before un secure credit card debt because they will take your car away within 90-120 days. If you don’t pay the CC cards for whatever reason no one is coming to take the stuff you bought with them. I know hind sight is 20/20 but just food for discussion.

  • Greg

    Matt, I am really new to this Mint thing and I am confused about how credit card payments show up green in the transactions and then shows up again negative.
    I have read you book Mastering Mint and there are no specific explantions about this issue in there.
    I realize there is a process here that I don’t understand. Can you explain it to a simple minded man like myself.

    • Cody

      I was having the same issue/question until I had an Ah Ha! moment. The reason both the debit (the black) and the credit (green) shows up is because you are looking at ALL of your account grouped together. So when you pay off $100 to your cc, you will see -$100 AND $100 (green) right next to each other. When you pay that $100, $100 gets deducted from your checking account (shows up as the black -$100). The $100 travels then to your credit card account and credits the account, which reduces your debt by $100. It shows up as green because it is basically saying your credit card account made $100, thus reducing the overall negative balance by $100. If you looked at ONLY your checking account, you will only see the debit, not the credit. If you ONLY looked at your credit account, you will only see the credit, and not the debit. When you look at them TOGETHER, they both show up.

      I hope Matt already answered this question, but thought I would throw in my two cents for anyone else who reads this and has the same issues/confusion.


      • Cody, you’re absolutely right! You’re just sucking $100 out of one account to feed another.

        Thanks for replying with the answer, seems I lost track of this one!

        • Cody

          No problem. Love you guys. I just discovered you guys last weekend and I have been addicted. I listened to 2 recent episodes first and was hooked so I actually started at the beginning. I have been able to listen to a little over 25 episodes in a week and a half and wish there were more hours in the day. I’m a doctor and a new grad and am fortunate enough to be running my own clinic right out of school and having some success. Now that I am actually making a decent living the first time in my life (former minor league baseball player), I need to get myself out of the Student loan insanity that comes with being a Dr. as well as pay off my cc and start saving and investing. I have been really enjoying the process (as scary as it is at times). You guys rock and glad I was able to help. Hope to contribute more in the future or even be a guest for you guys and be a success story/listener check up later down the line. Keep doing what you guys are doing. You are doing great.

          • Dude, sounds like you’re crushing it, can’t imagine how much work it took to get your own clinic setup.

            As for the debt, investing and general crushing the shit out of finance, email me at listenmoneymatters@gmail.com. We should chat :)

  • I love Mint.com. It has gotten me to thinking more about my money. You need to especially start a budget and write down those bills.

  • Nick Dickens

    I must really worried as I’ve got a credit card. I thought it was affordable bit the last few months I’ve paid £500 and my bill hasn’t come down by a penny. In fact it’s gone up by £10.07!!! WTF?!