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Smart Credit Card Strategies

Smart Credit Card Strategies

November 02, 2023

US credit card debt has reached a record high. According to the Federal Reserve Bank of New York, total credit card debt stood at $986 billion in the first quarter of 2023.1 The average balance of credit card debt is currently over $5,700, according to TransUnion.2

For many Americans, credit card debt isn't due to buying fancy clothes or going on elaborate vacations. TransUnion's vice president of US research and consulting says that because inflation is at near-40-year-high levels, many people use credit cards to manage their budgets and pay for everyday living expenses.2

Credit card debt makes it hard (if not impossible) to feel financially secure and save for goals like retirement. But credit card debt doesn't have to be the end of your financial freedom. Here are some smart credit card strategies to help you pay down your debt and start taking control of your financial future.

Create a Budget (and Stick to It)


Start by making a realistic budget that fits your lifestyle. After looking at your income and expenses, determine how much you can set aside each month to pay off your debt. By cutting back on unnecessary expenses and redirecting those funds to your credit card payments, you'll avoid adding more debt and steadily make progress toward becoming debt free.

Prioritize High-Interest Debt


If you have multiple credit cards with different interest rates, it's important to tackle the ones with the highest interest rates first. Put more of your repayment budget toward those high-interest debts while making minimum payments on the others. By focusing on high-interest debt, you'll reduce the amount of interest you pay over time and speed up your debt payoff journey.

Consider Balance Transfers


Balance transfers can help you consolidate your credit card debt and save on interest. Look for credit cards that offer low or 0% introductory APR on balance transfers, and then transfer your balances from high-interest credit cards to the new ones. This way, you'll lower your interest payments.

Use the Snowball or Avalanche Debt Repayment Method


Two popular debt repayment methods are the debt snowball and the debt avalanche.

The debt snowball method involves paying off your smallest debt first while making minimum payments on the rest. Once the smallest debt is gone, move on to the next smallest one and so on, creating a snowball effect.3 On the other hand, the debt avalanche method focuses on paying off the debts with the highest interest rates. This method will take longer for you to see the impact of your efforts, but it'll save you money on interest payments. Choose the method that best resonates with you and keeps you motivated.

Negotiate Lower Interest Rates
Try contacting your credit card issuers to negotiate lower interest rates. If you have a good payment history, they may be willing to reduce your interest rates, which can help you pay down your debt faster. Lower interest rates mean that a larger portion of your payment goes toward the principal balance, allowing you to progress more quickly.

Avoid New Credit Card Debt
While paying down your existing credit card debt, it's crucial to avoid accumulating new debt. Freeze your credit cards and commit to using cash or a debit card for your purchases. This way, you won't add to your debt burden and can focus on paying down what you owe.

Paying down credit card debt requires discipline, commitment, and the right strategies. By creating a budget, prioritizing high-interest debts, considering balance transfers, using debt repayment methods, negotiating lower interest rates, and avoiding new credit card debt, you can take control of your financial situation and work toward a debt-free future.


  1. https://www.newyorkfed.org/newsevents/news/research/2023/20230515
  2. https://www.cnbc.com/2023/05/15/credit-card-debt-is-at-a-record-high-how-to-pay-down-your-balance.html
  3. https://www.creditkarma.com/advice/i/what-is-the-snowball-method

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.