credit card debtWhether you have slowly increased your credit card debt over time, or you had to cover a large, unexpected expense with your card, if you are stressed about your high credit card balance, it may be time to do something about it.  

First you should know that you’re not alone. Collectively, Americans are facing a mountain (an Everest Mountain) of credit card debt—more than one trillion dollars in 2023 according to a report from And as the Federal Reserve has raised interest rates over the past couple of years the cost of maintaining a credit card balance has also risen. It now averages 20.68% for all current credit card accounts.

Although savvy financial advisers will tell you there is no-one-size-fits-all way to get to a zero dollar credit card balance, here are six options for making a credit card mountain into a molehill.

The Debt Snowball

With this strategy you pay off the account with the lowest balance first, while continuing to pay the minimums on all other accounts. The debt snowball approach helps build momentum and a sense of accomplishment as you knock off your debts one-by-one. says “[t]o do it, make a list of all your account balances in order of smallest to largest — and include the minimum payment amount for each — and allocate funds to pay the minimum amount due on all of your accounts except the one with the smallest balance.

For the account with the lowest balance, pay as much of the total due as you can until you’ve paid off all the debt and then continue to do the same thing with the account that’s next on your list.”

The Debt Avalanche

With this “cousin” of the debt snowball you pay off high-interest debts first and make minimum payments on the rest. This method can make the most sense financially because you are cutting your interest expenses sooner.

Once you’ve paid off the account with the highest interest rate, “you put the same amount of money you were paying towards that debt to the account with the next highest interest rate,” advises “Then you continue to do this until you’ve reached the bottom of your list of accounts. Of course, you’re always paying the minimums on all your debts.”

As you would expect there are pros and cons for both methods. With the debt snowball you will see progress more quickly which can help motivate you to continue paying off debt. But, you will pay more interest over time. The “con” for the avalanche method is that your progress will seem slower. But the “pro” is that you’ll save the most money by taking on your highest interest rate debts first.

Consider Debt Consolidation

The average American household has four credit cards so if your credit is still good you may want to consider consolidating all your credit cards into a single account. That way, you have one payment each month as you chip away your debt.

“It might seem counterintuitive to apply for a credit card when your main goal is to get out of credit card debt,” advises, “but 0% balance transfer cards can help save you money in the long run. Find a card that offers a long 0% introductory period — preferably 15 to 18 months — and transfer all of your outstanding credit card debt to that one account. You'll have one simple payment each month, and you won’t pay interest.” You may have to pay a transfer fee of 3% to 5% but that’s a lot lower than a 20 plus percent interest rate.

Take Out a Home Equity Line of Credit (HELOC)

If you have substantial equity in your home (20% or more) a home equity line of credit can transform high-interest credit card debt into a loan debt with a much lower rate. Typically, HELOCs offer a 10 year period to draw money and a 20 year repayment period for a total 30 year term.

But before you dive into the HELOC pool beware of the risk. While the interest rate is likely to be much lower, your home is the loan’s collateral. If you default on the loan, the lender can take possession of your home.

Try Working with Your Creditors

If you have been a longtime customer with a good track record of payments, your credit card company may be willing to work with you. Many credit card companies offer hardship programs especially for customers who have lost their jobs or have been hit with unexpected medical expenses.

“Put simply, credit card providers would prefer you make some payments rather than default on that debt,” Forbes magazine points out. “While your credit card providers want you to make timely payments, it’s advantageous to them to help you in the process. If you are proactive, forthcoming about your circumstances and demonstrate a desire to pay, it’s in their best interest to work with you.”

Debt Relief

If you are so deep in debt that you can’t manage even the minimum monthly payments, you may need to consider more serious options such as a debt management plan or even bankruptcy. reports that “[d]ebt management plans are created with the help of a nonprofit credit counseling agency. Counselors negotiate new terms with your creditors and consolidate your credit card debt. You’ll then pay the counseling agency a fixed rate each month. Your credit accounts may be closed, and you may have to forgo new ones for a period of time.”

Chapter 7 bankruptcy is a type of bankruptcy that allows you to quickly clear away debts, but not without considerable pain. It's also called a liquidation bankruptcy because you have to sell nonexempt possessions or assets to repay your creditors. Be aware that some debts, such as tax debt and student loans generally can’t be expunged by bankruptcy.

Chapter 13 bankruptcy is also known as a wage-earners bankruptcy and can help you restructure your debts into a payment plan over three to five years. It can be the best option if you have assets you want to retain. A Chapter 13 filing can stay on your credit report for up to ten years, though your credit score is likely to bounce back some a few months after filing.

Racking up credit card debt is all too easy, but paying it off, that’s much harder and can even be painful. We hope one of the strategies outlined in this article can help you craft a plan that works and reduces your pain — even if it takes awhile.

The information contained in this article is not intended nor implied to be a substitute for professional financial advice, it is provided for informational purposes only.


Sean D. Cuddigan
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SSA and VA Disability Attorney in Omaha, Nebraska