How To Pay Down Your Credit Card Debt

Suze Orman has already made her position clear.  She doesn’t want you to pay down your credit card debt and instead keep setting aside the money until you have at least eight months of worth of spending cash saved up.

For most financial advisors, though, paying down that debt is still the best solution, a looming economic recession and all. Of course, telling you to pay off your debt is way easier than the actual act of paying it down.  There are many ways you can do it, although the so-called “Snowball Method” has always been my personal favorite.

1. List down your credit card debts in the order of their interest rates.  The higher the interest rate, the earlier it should appear on your list.  In the event that two debts carry similar interest rates, put the one with the higher balance on top.

2. For each of those debts, pay only the minimum amount per month, except for the one in the first position.  For the highest interest debt, pay it down as much as you can.    Try not to worry about the interests those other liabilities are incurring - there’s nothing you can do about it at this point.

3. After that debt in the number one position has been paid off, start doing the same for the next one in your priority list.  Pay only the minimum for the other debt except the new highest-interest one.

4. Continue doing the process, snowballing the payment process down to the bottom, until all your debts are paid in full.

It’s not easy and, if you carry a considerable balance, it will likely take you several years before clearing it all for good.  Hang in there, though.  You can do it!