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Five tips to pay off credit card debt

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Guest blogger Leanne Salyzyn is an insolvency counselor, licensed restructuring professional and trustee in bankruptcy. Post a comment or contact her on Twitter with your personal-finance questions.

If you’re like most, no matter what your income level, you dread receiving your credit card bill. Rarely, do we hear our friends say “Yippee, my Visa is due!” Far too often we hear complaints of never getting ahead. While difficult, it is possible to pay off credit cards if you know a few simple tips.

1. Know what you owe

It’s amazing how many people have no idea exactly how much they owe and to whom. Gather all bills, face reality and breathe. Do you know the exact dates your payments are due? Do you know what interest rate you’re being charged if the balance was not paid in full? Educate yourself. Ignoring debts will not make them vanish.

2. A goal without a plan is a wish

Prepare a monthly (or even weekly) spending plan. List all income sources, then deduct essential expenses for that time frame. The key word is “essential.” The leftover balance can be used to pay down the debt as fast as you can. The faster you pay, the more money you save. Systematically pay as much as you can. You can put vacation pay, a bonus, or even a tax refund can to good use.

3. Stash the card

You will never put a dent in the debt if you continue to use your credit card. It may seem impossible to live without the credit card safety net, but remember the card is extra debt—not extra income. Stop the bleed. If you don’t have it, you can’t spend it. Saying no to purchases may seem stifling, but it’s necessary. You must learn to live within your means.

4. Don’t be fooled

Credit card companies do not want you to pay off the debt. They make money on the interest you incur. They want to see you happy and getting everything in life, but at a profit. In fact, they would prefer you get a second credit card to pay off the first. Why? They know that you will likely pay off one but keep both and continue to use both. Learn to say “no” and be in control.

5. Get creative

Depending on how much debt you have incurred and your financial situation, you may never pay off the debt if you make sporadic payments. Consider transferring balances from a high interest credit card to a low interest credit card to save money and pay down faster. Consider liquidating assets such as your TFSA to free up cash to pay off balances. Consider consolidating debts into one lump sum by filing a consumer proposal. Most importantly, if you find yourself chasing your tail and getting nowhere, it’s important to seek professional advice from licensed professionals. Legal options are available to assist you and relieve your stress.


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