Credit card debt is the enemy.

The mission? Pay your credit card debt in full. Forever.

But first you need to armour up, get your allies ready, sharpen your weapons…

…have a ruthless strategy in place – and stick with it.

Ready?

Know your numbers

What can be more scary than the unknown?

Our brains can’t handle not knowing, so we fill the gaps so we can deal. And feel in “control”…

Paying back credit card debt is one of those scary unknowns. It can seem huge and unmanageable and we just don’t know where to start.

But here’s the good news:

Sometimes the worst case scenario is worse in our heads. And reality is actually better.

After crunching the numbers, at least now you’ll know exactly what you have to work with – so you can come up with a plan.

First things first…

1. Write down your net income

How are much are you making after taxes?

Don’t have that info? Find your last pay stub or check your bank statement and get the exact number.

This number is your ally, your weapon against debt.

2. Figure your total monthly spend

Give yourself a month to get an initial number, or estimate it by looking at your accounts.

But for more accurate results, keep tracking even after a month so you have a better idea of the variations from month to month.

Tip: Start saving your receipts for anything and everything you buy and pay for. And don’t let the lack of a receipt give you an excuse to skip logging that expense. You can log it right in your smartphone notebook app.

Include ALL your monthly bills: phone, electric, water, car, mortgage, credit card payment, etc. Be thorough and on alert for anything you’re missing.

The key to successful tracking is to refuse procrastination. So, do it when you think about it.

After 30 days, you should know 2 things:

  • your monthly total spend, and maybe even more important…
  • your spending breakdown.

3. Seal the leaks

I know it’s early, but you’re basically halfway there when you know your numbers.

But now it’s time to be absolutely brutal with your budget.

First things first: Do you have money leftover?

If you do, congratulations. But this is hardly the time to stop.

And if you don’t, it’s time to dissect your spending breakdown. Some questions to get the process started:

  • Where is your biggest spend?
  • Are these one-time or recurring expenses?
  • Which of these items can you absolutely not live without? (Hint: anything that puts your life, health, work, and people around you in jeopardy are worth taking a pause.)
  • Are there any items you can completely delete from your budget?
  • Are there any items you can shrink in your budget?
  • What portion goes to credit card repayment? And other debt repayment?

And then plan an attack:

  • Which expenses can you slash today?
  • And if not today, when?
  • Exactly what will you do to keep the expenses low not only today but on a long-term basis?

This isn’t fad diet, this is your life. You need to be totally in.

Reduce your interest rate

Always research and compare your credit cards.

Typical interest rates are 19.99% or higher. The questions are:

  • what’s your current rate, and
  • what’s your current balance?

Armed with this information, here’s a few things to consider:

4. Research balance transfer promos and offers

Credit cards with balance transfer promotions offer interest rates as low as 0% for a set period of time, typically between 6 and 12 months.

If you are approved, you can transfer your balance from a high-interest rate card so your interest rate immediately drops to 0% for a limited period. Now some things to keep in mind:

  • There are limits to how much balance you can transfer.
  • That 0% only lasts for a relatively short period.

Maximize your interest savings by paying off your balance as much as you can. Give it all you’ve got.

Here’s the #1 balance transfer card in Canada:

  • Income Requirement: $35,000+
  • Purchase Interest Rate: 19.99%
  • Cash Advance Interest Rate: 24.99%
  • Balance Transfer Interest Rate: 21.99%
  • Balance Transfer Promo Rate: 0.00%
  • Balance Transfer Promo Term: 12 months

Here are two other good low interest credit cards:

  • Income Requirement: $0
  • Purchase Interest Rate: 8.99%
  • Cash Advance Interest Rate: 8.99%
  • Balance Transfer Interest Rate: 8.99%
  • Balance Transfer Promo Rate: 1.99%
  • Balance Transfer Promo Term: 6 months

  • Income Requirement: $0
  • Purchase Interest Rate: 11.90%
  • Cash Advance Interest Rate: 11.90%
  • Balance Transfer Interest Rate: 11.90%
  • Balance Transfer Promo Rate: 3.99%
  • Balance Transfer Promo Term: 9 months

5. Negotiate your rate

If your credit score is in the tank, you may not be able to apply for a new low interest card.

But … you can always call your current issuer and ask for a lower rate.

Tip: You can also negotiate your annual fee.

Be super polite, yet persistent. Explain your challenges and ask for a lower rate for a specific period of time.

The worst thing that can happen is you spent 15 – 30 minutes on the phone…

Or the better scenario: you get a lower rate and save hundreds in interest. Not bad for just a phone call, right?

And, if you get a no the first time, you can always call again and speak to another agent or request a supervisor.

6. Consider a HELOC

If you own a home, a Home Equity Line of Credit may be worth a look.

Home equity is the paid portion of your mortgage. For simplicity, if your house is valued at $500K and the unpaid balance is $400K – then your home equity is $100K.

But, I include it here with extreme caution.

The real danger is that the artificial increase of cash flow will be seen as legit extra cash – but it’s not. It’s borrowed money. And it needs to be paid back in full with interest rates which are between 3% and 4% these days.

So this is only worth considering if you’re absolutely certain the reason you’re applying is to kill debt – not increase it.

Pay your balance in full every month

7. Consider low interest rate credit cards

Low interest rate credit cards typically offer interest rates between 5% to 15% – depending on your creditworthiness. But, unlike balance transfer promotions, you don’t need to worry about time running out. These lower rates stay are permanent as long as you pay on time.

The upside here is less stress and less pressure to get your balance paid within a limited period of time.

However, its upside is also its downfall because your debt repayment could drag on.

Pay down credit card debt aggressively

Adopt a ruthless focus on your monthly payments. Because debt deserves no mercy.

8. Pay MORE than the minimum payment

Minimum should be banned from the English lingo. Such an offensive word.

Minimum effort. Minimum service. Minimum respect.

We can do better. So, let’s raise the bar.

The question becomes: what’s your maximum?

Now that you know your numbers, put the maximum you can towards debt repayment every single month and never think of minimum ever again.

9. Tap into your savings

So you’ve reduced your credit card interest rate, what’s next?

Does it make sense to tap into your savings account? Couple of reasons why this may make sense:

  • Depending on where you’re banking, regular savings account interest rates are pathetic ranging from 0% to 0.4% (you might get 2% with the best high interest savings accounts out there).
  • Interest earned on savings is taxed at your marginal rate (probably 30%+), the interest you save by paying off debt is NOT.

Increase your income

10. Pick up more hours

If you’re in a field where you’re able to pick up more hours for extra income, consider yourself lucky. Because this should be a reasonably easy way to increase your biggest weapon against debt: your income.

So start a conversation with your supervisor, and let them know they can count on you if ever they’re short staffed or need extra help at work.

11. Side hustle

You don’t even need to be creative or crafty. And you can start posting your service today.

Head over to Kijiji, and browse through their “Services” list for a decent list of side hustle ideas.

Do some light research and you’ll see how much folks are charging for their services.

Avoid credit card debt forever

This is just the start.

Expect that there’ll be some bumps in the road. Because life.

But as long as you know your numbers, you’ve got a plan, and you stick to it with pig-headed determination… you can pay off your credit card debt in full forever.

You’ve got this.