Make This the Year You Get Out of Debt

On average, American households with credit card debt hold credit card balances of more than $5,700.1

Servicing this debt with a minimum payment of $25 per month and an average annual percentage rate (APR) of 14.00% means you’ll pay more than $3,325 in interest alone.2 If you want to shake loose from your credit card debt this year, here’s your plan:

Pick one credit card for emergencies. From among your cards, pick the one that offers the lowest annual rate—that’s your emergency backup. 

Stop using your credit cards. Find a dark place for all your other cards—as far away from you and your wallet as possible. Better yet, get out your scissors and cut them up. 

Prioritize paying off your credit cards. Pick the highest-rate card you have with a balance. Pledge to pay the minimum payment PLUS as much more as you can afford every month. Make it enough to create a sizeable hole in the outstanding balance.

Stay focused. When your highest-rate card is paid off, pick the next card to attack. In the meantime, check to see if you can get a lower rate on any of your cards. If you carry a $3,000 balance, make a minimum monthly payment of 3% and are charged a 16% annual percentage rate (APR), you’ll pay interest of nearly $400 in the first year. If you can switch to a card with a 9% APR, that drops to about $220—a savings of roughly $15 a month. Finding a lower rate may help keep the balances in check as you work to whittle them down.

Protect your credit rating. While focusing on paying off your high-interest-rate cards in order, be sure to pay at least the minimum required payment on all your other accounts each month.


1 “Credit Card Statistics, Industry Facts, Debt Statistics,”, January 2017.
2 "The True Cost of Paying the Minimum," Calculator,, January 2017.

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