CNN Underscored reviews financial products such as credit cards and bank accounts based on their overall value. We may receive a commission if you apply and are approved for a card, but our reports are always independent and objective.

If you’re struggling to pay off your credit card debt, you’re definitely not alone. A recent report by Lending Tree showed that Americans collectively owed $804 billion on their credit cards at last count, and the average outstanding balance per borrower was $6,569.

Unfortunately, the average credit card interest rate or annual percentage rate of charge (APR) was 14.54% in the third quarter of 2021. This means that the average consumer with credit card debt has a significant percentage of its payment for interest costs. It also means that, for consumers paying this rate or even higher, paying off credit card debt is more difficult (and expensive) than it should be.

Fortunately, there are plenty of strategies you can use to manage your debt and pay off your credit cards once and for all. So if you’re struggling with debt that you can’t pay off, consider one of the following proven debt repayment strategies.

The Debt Snowball Method helps consumers pay off their debts by helping them achieve psychological gains early on. With this strategy, participants list all the debts they have, from smallest to largest, and then focus on the smallest debts at the start.

To use the debt snowball, you would make the minimum payments on all of your largest debts, then funnel the extra money you have into your smallest debt each month. Over time, the smaller debt is paid off, at which point you snowball the extra money you pay for the next smaller debt.

With the debt snowball method, smaller debts melt away over time, leaving only larger ones. Eventually, users only pay off their largest debt until they are fully debt free.

Example: Let’s say you have four credit cards with balances of $7,000, $4,000, $3,300, and $2,500. With the debt snowball, you would focus your largest payment on the $2,500 balance first, followed by the $3,300 balance, then the $4,000 balance before focusing on paying off the balance. $7,000 last.

All debt reduction strategies have pros and cons — there is no perfect solution. So here are the pros and cons of the debt snowball.

Advantages:

  • Score psychological victories by paying off your small debts early on
  • Helps you reduce the number of bills you pay early in the process

The inconvenients:

  • May result in higher total interest charges over time

Unlike the debt snowball, the debt avalanche method helps consumers pay off their debts in the most mathematically advantageous way possible. With this strategy, participants list all the debts they have according to their interest rate, then focus on the debts with the highest interest rates first.

To use Debt Avalanche, you make the minimum payments on all of your lowest interest rate debt, then funnel all the extra money you have into your highest APR debt. Over time, the debts with the highest interest rates are paid off, at which point you “swim” the money you were paying for the debt with the next highest APR.

As you go, you will pay off your debts with the highest interest rates, then those with lower interest rates, then some debt, then none. This strategy helps you save the most on interest since you tackle the debts with the highest APR first.

Example: Let’s say you have four credit cards with APRs of 22.99%, 19.99%, 12.99% and 11.99%. With Debt Avalanche, you would focus your biggest payout on Debt with the 22.99% rate first, followed by 19.99% Debt, then 12.99% Debt and then Debt. with the APR of 11.99% last, regardless of the size of that debt. .

Advantages:

  • Save money on interest by tackling debts with the highest interest rates first

The inconvenients:

  • You might end up paying off bigger debts first, which can be daunting
  • May take longer to reduce the number of payments you make each month
black woman with debt consolidation plans

iStock

Consumers can also use a debt consolidation loan or personal loan to get out of debt. With this strategy, you borrow enough money to pay off all your credit cards, then start making one monthly payment for your personal loan instead.

Personal loans can be a good choice for debt consolidation since they come with fixed interest rates, fixed monthly payments and a fixed repayment schedule. This means you know exactly how much you owe at any given time and exactly when you will be debt free.

Example: Let’s say you owe $10,000 on four credit cards with relatively high APRs. If you took out a seven-year personal loan for this amount, you would use the loan funds to pay off all of your credit cards, and then use all of your monthly payments to pay off the single personal loan. If you qualify for a loan with an interest rate of 6%, you will pay $146 per month for seven years (84 months) until you are debt free. In the meantime, you would pay a total of $2,271 in interest charges.

Advantages:

  • Simplify your finances with one monthly payment
  • Consolidate your debts at a lower APR than what you are paying now
  • Know exactly when you will be debt free
  • Many personal loans have no annual fees and no hidden fees

The inconvenients:

  • You need good credit to get a personal loan with the best rates and terms

Another debt repayment strategy is to apply for a balance transfer credit card. Cards in this slot allow you to consolidate and pay off your debts at 0% APR for a limited time, typically up to 21 months. A balance transfer fee is required, but people who can pay off their debt during their card’s introductory period have the opportunity to save big on interest and progress to paying off their debt faster.

Example: Let’s say you owe $10,000 on four credit cards with relatively high APRs and you request a balance transfer card that offers 0% APR on balance transfers for 21 months in exchange for a 5% balance. After consolidating your debts, you owed $10,500 including fees, but if you could pay $500 a month over 21 months, you could pay off that debt with $0 in interest charges.

Advantages:

  • You can pay no interest on your debt for a long time
  • Most balance transfer cards don’t charge an annual fee

The inconvenients:

  • You generally need good credit to qualify
  • You only get 0% APR for a limited time, after which the standard variable APR applies
woman with calculator and laptop budgeting getting out of debt

If you want to get out of debt, you have to be willing and able to change your lifestyle, at least for a while. Here are some simple tips that can help you stay on track:

Make sure the debt repayment strategy you use matches your personality and lifestyle. For example, don’t apply for a balance transfer credit card if you know you’ll be tempted to use it for purchases.

If you continue to use credit cards, you may never pay off your debt. While you’re in debt repayment mode, it’s helpful to avoid credit cards and stick to cash or debit instead.

Take a closer look at your lifestyle for signs of wasting money. Try shopping for groceries, cooking more meals at home, and avoiding places and situations that might tempt you to overspend.

Write down your income in one column and all your regular bills and expenses in another, then compare them. A written budget can help you stay focused and on track with your goals, including your current debt repayment strategy.

Racking up debt is often a breeze, but paying it off can be downright painful. Fortunately, these debt relief methods can help you save money, pay off your debts faster, or both.

We hope one of the strategies in our guide can help you come up with a plan that works, even if it takes a while. And if you’re worried about breaching your credit or defaulting on your obligations, you can contact a credit counseling agency for help.

Get all the latest personal finance deals, news and advice from CNN Underscored Money.