Smart Ways to eliminate credit card

One question that I get asked quite regularly is how to tackle credit card debt. It’s easy to fall into the trap of credit card debt as we all like the idea of buy now pay later. And that’s okay if you are paying your credit card balance each month. If you clear the balance due each month you end up paying no credit card interest and not building up debt.

But the reality is a lot of people don’t pay the full balance each month and credit card companies make a serious amount of money.

Here are some smart ways to eliminate your credit card debt.

Stop using your credit card

Stop adding to your debt, if you continue to use your credit card you are just adding to the problem. Cash is king! Give yourself a weekly budget and take that money out at the start of the week and make it last to the end.

Make cuts backs where possible.

Here are some quick and easy ones that everyone can do. Make your morning coffee at home, bring your lunch to work and stop buying bottled water!

Reduce your credit limit

An issue for consumers, which is built into the process by the credit card companies, is the credit limit – and the automatic increases of your credit limit.

Having a smaller credit limit will stop you from overspending and will help slow down the rate at which you’re building up debt

Contact your bank/ lender and ask for a lower interest rate.

Often a simple phone call to the issuer is all it takes to get a reduced rate—provided that you are a long-term customer who makes payments on time.

If you’ve been offered a lower rate by a competitor, tell the customer-service rep, there’s a chance they’ll match the offer.

Transfer the balance to a credit card that offers 0% on balance transfer

Move your balance from a card with a high interest rate to a card with a substantially lower one (find one here ). Potentially this is a smart move; you can save hundreds a year. But be careful: You should transfer a balance only if you’re committed to paying off the debt within an introductory low-interest-rate window (which typically lasts 6 – 8 months) and to making monthly payments on time.

Otherwise your rate could skyrocket, possibly ending up higher than the one you just got rid of. (Important: You should also avoid making any purchases with the new card, as sometimes the low interest rate won’t apply to them.)

Use the debt ladder

This is my tried and trusted method that will guarantee success. By tackling your debt in manageable chunks, you will get multiple small wins and a sense of accomplishment that means you will feel good and will continue to pay it off.

This strategy is practical and simple. That’s why it works.

– List out all of your debts from the biggest amount to the smallest amount

– Next list out the monthly repayments that you make on each debt and it will probably look something like this:

Lender Balance Payment
1 Car loan €8,000 €265.09
2 Credit card 1 €4,000 €200
3 Credit card 2 €3,000 €133.23
4 Credit union €2,000 €100
€17,000 €698.32


-Now, you need to re-structure the repayments on your debt

-Add up the total monthly repayments, this will stay the same or if you can afford to, increase

-Next you will reduce your monthly repayment on all your debts (bar the smallest balance) to the minimum amount acceptable

-And finally, you will increase the repayment on the smallest debt balance to the maximum amount you can afford

It should now look like this:

Lender Balance Payment New payment
1 Car loan €8,000 €265.09 €100
2 Credit card 1 €4,000 €200 €100
3 Credit union €3,000 €133.23 €70
4 Personal loan €2,000 €100 €428.32
€17,000 €698.32 €698.32


As you’re directing the maximum amount to your smallest debt you will pay off this debt much quicker.

In the sample above you will pay off your personal loan in 4.6 months rather than 20 months

Congratulations! You have paid off your first debt

Lender Balance Payment New payment
1 Car loan €8,000 €265.09 €100
2 Credit card 1 €4,000 €200 €100
3 Credit union €3,000 €133.23 €498.32
4 Personal loan €2,000 €100 €0.00
€698.32 €698.32


The next step is to keep up the momentum and the repayment is rolled into the next one on the list and so on until you make your way up to the top of ladder.

Lender Balance Payment New payment
1 Car loan €8,000 €265.09 €698
2 Credit card 1 €4,000 €200 €0
3 Credit union €3,000 €133.23 €0.00
4 Personal loan €2,000 €100 €0.00
€698.32 €698.32

The debt ladder method works because that when a debt is paid off, even if it is the smallest one, the satisfaction that you feel will be enough to keep you going to the end.