12 most effective ways to get out of credit card debt faster

paying off a credit card debt can seem like an overwhelming prospect for many people. the apprehension is reflected in India's household debt, which has witnessed a steep incline in the past few years, shooting from an average of ₹9,017 in 2015 to ₹16,239 in 2019.
but you can take heart in the fact that millions of people have successfully paid off their credit card debts, as long as they've had a plan and stayed committed to it. so, here are 12 ways to clear off your credit card debt.
you may not realize it yet, but navigating debt and emerging debt-free helps people evolve in the way they engage with money and build their own credit-worthiness. so it's helpful to approach this journey as a project, a challenge, and a learning opportunity.
by designing a concrete plan based on strategy, you will pay off your debt faster. you can also get your credit score back on track - and there's nothing in the world that lowers your stress levels faster than a healthy credit profile.

12 ways to clear off your credit card debt

this 12 step approach will not only help you build a plan but help you emerge as a financially savvy consumer.  

step 1: write it down
knowledge is power when it comes to reversing your credit card debt. the first step is to note down important numbers connected to your debt.

• list all your credit cards and the amounts owed on each one.
• write down the interest rates being charged on each card.
• write down the minimum amount due every month on each card.
• write down the yearly fees charged by the company on each card.
• write down the payment dates for every credit card.
• create an excel sheet to track all your payments.

having clarity on the above information is the key to paying off your debt as soon as possible. 

step 2: prioritise your payments 
an important step towards freedom from debt is to correctly identify the chronology in which you will make your credit card payment. 
this approach not only helps you pay off debts in a systemic way, but it also helps you prevent the owed amount from increasing due to the interest charged. the other benefit is that by paying off debt on each card one by one, you stay motivated and also rebuild your credit score. 
on the other hand, if you try to pay an equal amount on each card every month, the interest will keep accruing. this impacts your credit score as well as your ability to access loans and other financial products. 

step 3: make your payment plan 
so what's the chronology when paying off credit card debt? there are some simple ground rules to this, and it's all in the math.   
the credit card with the highest interest rate is usually the winner. commit to paying off this card first, while paying the minimum amount on all other cards. this approach, also known as the avalanche method, ensures that most of your credit card bill payment goes towards the principal amount and not the interest.
once the card is paid off, start paying off the one with the second-highest interest, while paying the minimum amount on other cards.
if your remaining cards have the same interest rate, then start paying off the one with the higher amount owed, and pay the minimum amount on the other card.

step 4: always pay the minimum amount 
this amount is clearly mentioned in your monthly credit card bill. if you do not pay even the minimum amount on each card, you may be charged additional late payment fees, adding to your existing dues. 
there is also a possibility that once you cross the credit limit available, your credit card will get suspended. 

step 5: always pay on time
at crunch time, paying your bills on time is non-negotiable. it's a good idea to calendar your payment schedules a day or two in advance of the official payment date. this wins you some buffer time in case you're falling short of the pre-decided amount to pay off each month. 

step 6: negotiate with your bank 
the RBI moratorium for credit card payments has not been extended past august 31, 2020. still, it doesn't hurt to have a conversation with your bank to renegotiate certain terms. 
ask your bank if the interest rate can be lowered, for example, or if they can waive or reduce the yearly fees.
if you have been a long-standing customer who has always been responsible with your payments, then you may have leverage, and banks are usually willing to listen. however, if credit card debt is a part of your usual history, it means you need to work on your credit-worthiness. 
that being said, you should absolutely try having a conversation. stay calm and collected for the best outcomes. 

step 7: consider a credit card balance transfer 
a balance transfer is a very useful opportunity for customers in credit card debt. it empowers them to transfer their dues to a credit card with a much lower rate of interest. 
several banks in India offer this facility, and some are also willing to allow you to transfer the dues of multiple cards to a single transfer balance credit card. 
there are several benefits besides lower interest rates. you may be able to opt to pay the card in installments, from three to 12 months. if you choose a smaller tenure, you may not even have to pay any interest. 
some banks demand that you pay the interest rate upfront. some banks may also charge a processing fee. by making the right choice, you end up paying a lot less, faster, and with less stress. 
this switch also gives you a fresh start on rebuilding your credit score.

step 8: consider a loan 
a worthwhile option is to take a loan from family and friends, of course, those you have a good relationship with. paying off your entire credit card debt at a shot with a little help will save you all that interest.
if you decide to go this route, devise a solid plan to pay back your loan. you can also consider offering an incentive. for example, if your existing credit card interest rate is 3.4% per month, you can offer an interest rate of 2% on your loan. 
the key is to have a clear agreement and honor the terms. 
never take a personal loan unless the interest rate is far less than what is charged on your credit card. however, typically, the interest on personal loans tends to be much higher. 

step 9: minimise your expenses 
how often do you experience that feeling - "where is my money going every month?" well, you're not alone. many people with disposable income don't know the answer to this one either. 
but it's never too late to make a fresh start. 
start by listing your monthly fixed expenses - rent, utilities, groceries, etc. see if there is any scope to reduce costs here. 
if not, move on to the next bucket, which includes impulse buys, personal care items, and consumer goods, which qualify more as "wants" than "needs". 
putting a moratorium for some time on leisure travel, expensive dinners out, and other unnecessary expenses is a good idea. redirect all the cash you'd be spending on things you don't need towards closing your credit card dues.  

step 10: pause investments while in debt
another habit that does not align well with financial trouble is continuing to invest while being in debt. even if you make some money on the stock market or mutual funds, any passive income gets negated as your debt mounts. 
the right approach is to stop investing for some time until your credit card debt is completely cleared. 
you could consider liquidizing some of your investments if it empowers you to pay off your debt. however, never touch your emergency fund as this protects you on a rainy day. 

step 11: increase your income 
we're often trained to believe all our income must come from one source - our job. however, more and more people are growing an entrepreneurial mindset by moonlighting in other roles and cultivating multiple sources of income. 
a good start is to make a list of all your skills and scour gig-work platforms for potential opportunities. with the internet, there's a whole new world for gig workers with skills like accounting, writing, editing, online teaching, design, to name a few. 
you can also consider turning a passion into a business. for instance, if you bake, crochet, or build stuff, you can market these products and grow both your money and your identity.
of course, every incoming rupee must go into your paying off your debt. 

step 12: celebrates your wins
taking a moment to celebrate every time you complete a milestone can help keep you motivated and committed to your goals. 
for instance, after paying off your first credit card, celebrate this win with a nice home-cooked meal and a drink with your loved one. doing small things for yourself at every juncture makes it special.

the secret to staying motivated!

despite all the micro-actions you take, paying off debt can be a lonely and sometimes, long journey. 
having a loved one in the know - a family member or friend - someone you can confide in, especially during those times when you feel demotivated, can make the journey much more positive. 
once you complete paying off your debts, start your new credit journey with gratitude and celebrate with the ones who supported you along the way.