5 Ways to Pay Off Credit Card Debt – Sponsored by Serve®

Disclosure: This post is sponsored by Serve®, but all of the opinions and viewpoints expressed in this post are 100% my own. 

If you have credit card debt, you’re not alone. It can be one of the most challenging and important types of debt to pay off because credit cards come with interest rates that can hit 16%-20% or higher. With interest rates that high, having credit card debt makes it tough to reach the rest of your financial goals.  

But there’s good news— there is a way out of credit card debt. With the help of Serve, I’m going to walk you through five things you can do to take control of your credit card debt and pay it off once and for all. 

1. Stop using your credit cards 

Paying off your credit card debt starts with no longer using them. This can be the hardest step if you’ve come to rely on credit cards to pay for everyday expenses. But it’s important to stop using credit cards because you’re only adding to your balance, which makes your payoff that much more difficult.  

Fortunately, there are a few things that may help you stop using your credit cards: 

• Remove recurring payments: If you have recurring payments, like subscription services, set up on your credit card, you’ll want to remove your cards from those accounts. This will give you a chance to reassess your subscriptions and decide if you really want to keep them. 
• Take your cards off your shopping accounts: Having your credit card numbers saved to your online shopping accounts makes it way too easy to use them. Deleting your card numbers from those accounts puts a barrier between you and more credit card debt. 
• Lock up your credit cards: Use the “out of sight, out of mind” approach and put your credit cards somewhere that takes some effort to get them. You can lock them in a file cabinet, safe, or even put them in the back of your sock drawer. 
• Track your spending and build a budget: After tracking your spending, you can compare what you’re spending versus what you should be spending. Then, you can create a budget that’s based on your actual income. 
• Find a better way to pay: Using a debit card, like the Serve® Pay As You Go Visa® Prepaid Card, is a healthier way to spend money if you struggle with credit cards. Serve’s Pay As You Go Prepaid Card features help you only spend money you have, and it can be a great way not to incur more credit card debt.  

Quitting credit cards altogether can be difficult, but the tips above can help you on your path to becoming credit card debt-free. 

2. Utilize the debt snowball method 

There are a couple of different debt pay-off strategies, and the first one I want to explain is the debt snowball method. Here’s how it works: 

• Every month you pay the minimum balance on all of your credit cards. 
• Put as much extra money towards your credit card with the smallest balance first. 
• After that card is paid off, move to the card with the next lowest balance, putting as much extra money towards that card while paying the minimum payment on the rest of your cards. 

The last card you pay off has the highest balance, but now you’re able to put a big chunk of money towards paying off that balance each month. 

This is a really popular plan because it builds your motivation through some early victories. Those victories have positive psychological effects that essentially cheer you on as you go. 

The debt snowball method is a good strategy if you find it hard to find the motivation to sustain a payoff.  

3. Utilize the debt avalanche method 

The debt avalanche method is a strategy that’s all about math, and it can actually help you save a little time and money on interest charges compared to the debt snowball method. Here’s how the debt avalanche works: 

• Every month you pay the minimum balance on all of your credit cards. 
• Put as much extra money as possible towards your credit card with the highest interest rate first. 
• Once the card with the highest interest rate is paid off, move on to the card with the next highest interest rate, while you keep making the minimum payment on your other cards. 

The debt avalanche takes discipline because you don’t see early victories as you do with the debt snowball method, but you can save money because you’re taking care of the cards with the highest interest rates first. Sometimes the debt avalanche can even shave time off your credit card debt payoff. 

Whether you use the debt avalanche or the debt snowball, both strategies will be easier if take advantage of this next tip. 

4. Pick up a side hustle 

Paying off debt, especially credit card debt, is seriously hard work. You’ve only got so much money to work with you when you rely on your current income alone, and that’s why picking up a side hustle can give your debt payoff plan a major boost. 

With the right side hustle, you can bring in an extra $500, $1,000, or $2,000/month, and you might be able to put a lot of that towards your credit card debt. 

My favorite side hustles are ones that are flexible and pay well for the work you’re doing. Here are some ideas: 

• Deliver food: On-demand restaurant and grocery delivery services let you pick your hours and help you make money in your spare time. You can realistically expect to make $10-$20/hour with delivery service apps. 
• Freelancing: By leveraging existing skills (or learning new ones), starting a freelancing side hustle is an excellent option. You can do digital marketing, graphic design, video editing, virtual assistance, writing, photography, bookkeeping, proofreading, and more. 
• Flip things for profit: Reselling things you buy for cheap at thrift stores or garage sales is a really flexible side hustle, and there’s a lot of potential if you know what to look for. You’d be surprised by what people get rid of, and how much extra money you can make reselling. 
• Pet care: People pay good money to have trustworthy people care for their pets. There’s pet sitting, boarding, and dog walking. Use word of mouth to get your name out there, advertise on social media, and there are also platforms designed specifically for advertising your services. 
• Rent out your stuff: Peer-to-peer lending has gotten incredibly popular, and you can now make extra money renting out rooms in your house, your car, your pool, storage space, and so on. This can turn into a fairly passive side hustle, which allows you to put your energy towards other side hustle ideas. 

Those are just a handful of options, and I truly believe there’s a side hustle out there for everyone. Even finding a part-time job can be a solid way to bring in some extra money to pay off your credit card debt. 

5. Cut back your expenses 

There’s a good chance that you’ve got more room in your budget than you think, and cutting back on some of your expenses can help you find extra money to put towards your credit card debt. 

Some people think that minor budget cuts won’t make a significant difference, but remind yourself that small amounts of money can help you make a dent in your credit card debt. When you compound your budget cuts with a side hustle and a payoff plan, like the debt avalanche or snowball, you can start doing some major damage. 

Here’s a quick list of ways to cut your expenses: 

• Meal plan to save money on food spending 
• Use cash-back and coupon apps to save money on purchases you’re already making 
• Get rid of cable 
• Find a cheaper cell phone service 
• Cancel unused subscriptions 
• Shop second-hand for furniture, clothes, home decor, workout equipment, and more 
• Try a no-spend week or month 
• Take advantage of the library 
• Unsubscribe from marketing emails that tempt your spending 
• Refinance your student loans 
• Shopper around for better insurance rates 
• Switch banks to avoid fees — the Serve® Pay As You Go Visa® Prepaid Card has a pay-as-you-go fee model, so it’s a very budget-friendly option 

It can be difficult to cut spending in the beginning, but once you get a hang of it, it becomes easier to identify and reduce non-essential spending.  

The final word on paying off credit card debt 

The reality is that millions of Americans are struggling with credit card debt right now too, so you’re not alone. Paying off your credit card debt can feel like an uphill battle at times, but paying them off is one of the smartest money moves you can make this year. 

As you get your credit cards under control, the tips above will help you stay out of credit card debt and start prioritizing other financial goals, like retirement savings or buying a new house.  

And remember, you’ve got the support of Serve. Serve’s goal is to empower its customers with hassle-free products, like the Serve® Pay As You Go Visa® Prepaid Card, that help you along your financial journey.