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5 Tips for Paying off Credit Card Debt

To have a credit score, you actually need to have credit. Let’s face it, no one wants to lend tens to hundreds of thousands of dollars to someone to buy a car or build a house if they aren’t confident that they’re going to get paid back.

One easy way to build credit is with a credit card, but it’s not enough just to have one. Making manageable purchases with a credit card–and making at least the minimum payment on time each month–is how you build a credit history. (We recommend paying your balance off in full each month, so you’ll avoid paying any interest on your purchases! 😉)

Once you’ve got a proven track record of paying those monthly payments, your current and future lenders will see you as a trustworthy borrower. So, if you have dreams of owning a home, buying a new ride, or taking out a personal loan to fund a dream purchase, you’ll want to start establishing your credit history as soon as possible.

Now wait – don’t just rack up charges on your card, though. It’s not a good idea to carry around a credit card balance indefinitely. You’ll want to show that you can pay your bills on time

On-time payments are how you get the kind of high credit score that makes you eligible for lower interest rates. And lower interest rates are the goal, because they make paying off your debt easier through more manageable payments.

So, make it a point to be credit card debt-free so you can save money in the long run by avoiding higher interest rates on future mortgages and loans. Remember, the finish line is to build credit, not to accumulate debt.

All of these are reasons why we’ve put together a list of five tips for how to pay off credit card debt.


1. Set a budget – and stick to it!

It’s easy once you’ve got that plastic in hand to go on a total spending spree. Don’t let that happen to you!

The goal is to build credit, not fulfill your wildest dream purchases. The best way to do this is to use your credit card where you would normally pay with your debit card or with cash. Then, pay off those charges in full as soon as possible.

This way, you’re not spending more than you normally would, but you’re still flexing those credit muscles.


2. Pay off the highest APR

If you have more than one credit card payment, pay off the one with the highest interest rate the soonest. Since interest only accumulates over time, you want to pay down that balance as quickly and as much as possible. This is the best way to save money over time.


3. Pay off the lowest balance card

But wait – if you have a card with a balance that is low enough, pay the one with the smallest balance off first. Getting rid of that balance completely is a great way to avoid carrying around debt.


4. Consolidate credit card debt

Another way to pay off credit card debt is through a debt consolidation loan. Under a debt consolidation loan, you can pay off your debt and only make one monthly payment. Ideally, you can even negotiate a lower interest rate.

You can take out this type of loan to tackle everything from credit card balances to student loans.

A secondary similar option is a balance transfer credit card. With this option, you transfer your balance from a credit card with a higher interest rate to one with a lower one. More manageable monthly payments mean you can pay off your credit card debt more quickly.


5. Pay off more than balance to get ahead

It can be tempting to try to save a little cash by making only the minimum payment. You’re making your payments on time, after all. What’s the big deal?

When you do this, you’re only making problems for the future U. Although you’re saving money with small payments now, you are only extending the amount of time it takes to pay off credit card debt.

Not only that, but the interest will only continue to build, meaning you’ll end up paying more money over time! So think about that – are you really saving money?

Take a look at what you can afford, and make more than the minimum payment with the goal of paying off your credit card balance as soon as possible!


Pay Off Credit Card Debt With A UMe Credit Union Balance Transfer Card

As a credit union, UMe is different from your typical commercial bank. We’re member-owned and not-for-profit. That means we’re all about helping you save and grow your hard-earned money

We believe that when one of us thrives, we all thrive!

If you want to consolidate your card payments and enjoy lower interest rates and more manageable payments, check out our Balance Transfer options.

Transfer a variety of loans, from other credit cards, student loans, car loans, and more, all with no balance transfer fees.

If you need a little time to pay off some debt, but don’t want to get buried in interest payments, our Balance Transfer options offer greater financial freedom at a fixed interest rate.

Curious to learn more about why this strategy can help you pay off credit card debt faster? Click the button below!

why transfer your card balance