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Our Year End Challenge: Pay Down Credit Card Debt


The holidays are here. Which means pie, eggnog, trees, tinsel―and debt. With inflation increasing and holiday debt a-plenty, maybe the tree isn’t the only thing you’ll want to trim this year. Cutting debt is a great resolution, and an excellent way to improve your financial health and stability. Plus it may be easier than you think – with a little help from your Credit Union.  

One of the biggest drivers of debt is Credit Cards.

Apart from actually cutting the amount of funds you pay interest on – cutting credit card debt can impact your credit score favorably. Most people know that keeping credit card debt around 10% -20% of your available credit helps maintain a good credit score. A good score helps you make necessary purchases when you need them, or to secure loans, all at lower interest rates. It also encourages long-term responsible spending habits.  

Overall, when you secure lower levels of debt and rates of interest, that means less money spent on servicing interest charges, and more for saving and the things that make life fun.

Below are a few simple ways to lower your credit card debt in starting this month (and into the New Year).

Ways To Pay Off Credit Card Debt

Timely Payments

The first place to start when looking to pay off credit card debt is to examine your credit card bills so you know exactly how much you owe, what your minimum payment is each month, due date, and the approximate amount of interest charged to you each month. Paying off credit card debt requires that you aren’t adding to that debt. Make sure you are making your payments on time and in full when possible. Keep in mind, if you are only making minimum payments, your unpaid interest charges will accrue and thus increase your balance. Carefully examine your bills to make sure your payments not only cover the minimum amount due, but the interest that is added to the bill each month. This attention to detail will help your balance drop faster all around.  One way to keep track is to enroll in electronic statements. Using your Credit Union’s eStatements not only gives you 24/7/365 access to your balance statements – but you’ll also qualify for perks worth up to hundreds extra every year. We also use money saved by not mailing out paper statements towards helping members in financial need.

Negotiating Payment Plans Or Rates

The next place to look for lowering your credit card debt is your own credit card company. By contacting your creditor directly, they may be able to assist you in either setting up a manageable payment plan or lower your interest rate. A lower interest rate or monthly payment would allow you to then take any money saved to put directly back into the monthly payment so that you are paying extra each month. Many factors can influence a financial institution’s willingness to agree to these types of changes including, credit score, length of relationship with the institution, and a financial hardship.

0% APR Offers

Another way to pay off credit card debt is to open another credit card account, under the right circumstances. While this may seem counterintuitive, a wise selection on a new credit card may be an easy way to lower your debt. If you are able to find a credit card with a 0% APR offer for 12 months or more, you can use that new card to pay off a higher interest rate card. You then have a 12-month buffer to pay off the new card in full without interest charges. If you choose this route, be careful to not put more debt back onto your old card and that you stay on track to pay off the new card in full by the end of the introductory period. If you don’t think you can fully pay off the new card by end of the period, this still may be worth the benefit, so long as the APR after the introductory period is not higher than the original card.  Your Credit Union (at the time of writing) is offering 6 months at 0% APR on all new cards.


Along the same lines, some consumers choose to consolidate their credit card debt through personal loans. These loans vary in requirements, including whether or not they are secured through personal assets. The benefits to consolidation include combining multiple debts into one streamlined bill and lowering the amount you pay each month. Consolidation loans should only be considered if the interest rate is lower than your current card and won’t significantly increase the amount of time it will take you to pay off the loan. Any money saved with your new lower payment should be added as an extra payment to your loan to pay it off faster. Make sure to check there are no prepayment penalties.  Your Credit Union offers an exceptionally low rate Signature Loan to help consolidate debt. Be sure to check it out and compare our rates.

Snowball Method

Finally, many debt consumers with multiple lines of consumer debt follow the Snowball Method to pay down debt. The Snowball Method is a fairly straight forward (and effective) way of paying off debt. Essentially, you choose one credit card or other debt to pay down first and begin making a higher monthly payment until that debt is paid off. During this time, only minimum payments are made on the other balances. Once the first card is paid off, you then transfer the amount paid on that bill as an extra payment on the next card or bill. As you pay off more debt, the larger your extra amount (or snowball) grows, allowing you to pay off debt faster as you go along

The Challenge

Now that you have different options for paying off credit card debt, here is your challenge:

  1. Explore at least one of the options above for paying off your credit card debt and start the process.
  2. Examine your budget (if you don’t have one use our expert, easy Budgeting Tool to set one up) and identify an extra amount that you can add to one of your credit card bills each month and commit to paying that amount for the rest of the year.

Extra Credit: Make your extra payment automatic so it becomes a regular habit through the year.

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