The Top 8 Credit Card Debt Tips from Reddit You Need to See

The Top 8 Credit Card Debt Tips from Reddit You Need to See

Redditors offer some great tips on how to deal with credit card debt and we picked our favorite ones to share with you. Through the article, you will learn about how to tackle credit card debt now.

Most adults have a credit card and credit card debt is not as uncommon as one might think. Figuring out how to pay off credit card debt can be a large feat. In this article, we’ve compiled the top 10 tips from Reddit to help you pay down your credit card debt.

Make a Budget

People talk about budgeting all the time, but a lot of people never sit down and actually write out a plan. In the Reddit post below, here’s a basic outline of what this might look like.

“The best thing I have seen is to develop a detailed budget, allocating every dollar you spend. Calculate the percentage you are saving from each cheque. Then pay the bills (1st cheque pays - water, trash, Netflix - 2nd pays rent etc…). For your credit card use, pay it like a debit card. Every-time it is used to transfer that money over, making sure to allocate it in your budget. This will force you to track it and prevent the account from ballooning on you.”

Actually Stick to a Budget

Once you’ve actually written out a budgeting plan, it can be easy for it to fall off and for you to lose sight of your set goals. Making sure that you keep to your budget is key to paying off credit card debt. This Reddit post explains how effective and crucial it is to keep your budget to avoid paying even more money overall.

“Make a plan to pay it off, and stick to it. Not just ‘I pay what I can each month.’ You can use this calculator to figure out how much you need to pay each month to pay off the card in a given time frame. Assuming that you have a debt of $5K at 19% interest, and you want to pay it off in 1 year you need to make payments of $460 each month. That's going to cost you $529 in additional interest charges (ouch!) To pay it off in 6 months you'd need $880 per month, and you'll pay $280 in interest. At $252 per month it'll take 2 years and you'll pay more than $1,000 in interest charges.”

Consider Consolidating Debt

If you’re able to, consolidating your debt could be a great option to lessen the amount of payments you have by combining them, thus making them simpler to pay off. The Reddit comment below offers this tip.

Consolidating can save you thousands if done properly, but it can end up costing you in the long run if not. One advantage of having a bunch of creditors is you have a bunch of people to negotiate with if hardship strikes. With a consolidated loan you have one big payment that you must make, or it's all for naught. So if you do choose to consolidate, make sure you've sealed up all the money leaks that got you here so that you're secure enough to stay caught up with the new loan.”

Pay Off Cards with the Highest Interest First

When you have multiple cards, deciding which one to pay on, when, can be confusing. The comment below offers a couple of helpful tips as to how choosing the right card can be very effective.

“I was in a similar position as you and am now debt-free.

  1. You should consider consolidating all of your debt with a low interest loan or line of credit. Depending on your income and current credit limits, you may or may not get an approval to take on additional credit, but nevertheless, it’s worth a shot.
  2. Focus on paying off the cards with the highest interest first and when that one is paid off, move off to the card with the next highest interest and so on. In personal finance you will hear about the “snowball” vs. “avalanche” methods, but in my opinion the avalanche method is wisest because it avoids accruing unnecessary interest.
  3. Stop spending your entire paycheck to pay off debt, just to accrue more debt. This makes no sense from a financial standpoint. You must create a budget that includes rent, utilities, bills, groceries, personal needs, etc. and set that money aside every month and then use whatever you have left over to pay off debt. A reasonable amount could be a few hundred dollars. You could easily pay off that $700 loan, for example, in only a few months.
  4. Do you have any money in savings? It’s better to pay off debt than having thousands in savings. If you have debt then those savings aren’t truly yours. I wouldn’t completely wipe them but if you have anything over $1000-$2000 you can use that to pay off debt.”

Stop Using Your Credit Card While You’re Trying to Pay it Off

If you always pay with a credit card, it’s likely best to stop using it while you’re trying to pay it off. By continuously adding to the balance, you won’t be able to pay it off as quickly. The comment below offers some extra validation to this tip.

“Stop using the cc if possible. You will never get out of that hole if you do.
Focus on your budget and if there’s somethings you can cut down on. Pay more than the minimum due if possible. I’d put more focus on one card. With the higher interest rate and go from there. It may be a long journey but once you see you’re making progress you’ll feel better about your situation. Good luck!”

Talk to Your Bank

Getting personalized support from your bank or an accountant can be tremendous help in the long run. By talking to someone who knows the specifics of your situation, you can get the best advice and create a financial plan for yourself. The first recommendation in this comment is to seek a professional.

“Honestly make an appointment with your bank and discuss options, I got a loan and consolidated quite a bit to one payment a month.”

Find Other Sources of Income

One way to pay down debt is to earn more money. While not always easy, it can be extremely beneficial to find another source of income when you’re trying to pay off a debt. This may come from another job like Uber driving, selling items you don’t need, or freelance working. This Reddit post offers similar advice.

“Take on extra jobs, sell stuff that she doesn’t need or use, don’t buy any new stuff, eat at home etc. Don’t go into debt to pay off debt.”

Keep Calm and Think About Using Gauss

This Reddit post said it best.
“Take a deep breath. You’re never going to get a handle on this if you keep approaching it haphazardly and emotionally.”

If you’re trying to pay off your own credit card debt, Gauss Money might be able to help you along the way. Gauss offers low interest credit lines, both on-demand and automatically. Your existing cards get lower APRs and you pay off balances much faster with no fees. Check out Gauss for a lower APR today to maximize your credit cards.