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Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. SHARE: D3sign/Getty Images August 22, 2022 Claire Dickey is a product editor for Bankrate, and . Before joining Bankrate, Claire worked as a copywriter for brands within the telecommunications industry as well as a hybrid marketing and content writer. Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Bankrate logo The Bankrate promise
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Editor’s note: Some of the offers on this page may be expired. Check out our page for the most up-to-date offers for our favorite credit cards. Credit card debt is never a good thing, and if you have hundreds or even thousands to pay off, a recession could make doing so exponentially harder, depending on your circumstances. Economists in say the chances of a recession in the next 12 to 18 months is 52 percent. While employment remains strong for now, soaring inflation, coupled with a series of interest rate hikes by the Federal Reserve, has led to a volatile stock market. You’ve probably noticed your income is not going as far as it used to. And if you’re carrying card debt, you’ve probably noticed the . Some experts predict a “soft recession,” rather than the drastic plunge of the Great Recession. Nevertheless, it helps to be prepared for a sharper downturn in your own circumstances. Paying down credit card debt is among the and it can make you far more financially resilient. Here’s how to do it. Set a debt payoff timeline
First and foremost, put together a rough timeline based on how much you can afford to pay off each month. The more you can put towards , the better. Take into account any necessary spending (i.e., house and car payments, grocery staples, childcare) and determine where you can afford to cut back. Cut out unnecessary spending
“In any economy, consumers should pay off their debt as quickly as possible,” says Kayse Kress, financial planner at Physician Wealth Services. “Take a hard look at your finances and make some adjustments. Analyze your fixed expenses first, and then decide what you can downsize or eliminate.” The first things to go should be unnecessary subscriptions like streaming services, meal prep boxes or monthly clothing/jewelry deliveries. You can also arrange for cheaper versions of plans or subscriptions you just can’t live without. “Cancel or renegotiate the cost of your cable or find a cheaper cellphone plan,” Kress says. “This type of budgeting can help you apply more of your income to paying off debt, rather than paying for fixed living expenses.” Applications can make it easier
Debt payoff planning can be stressful and even confusing, but there are a few that can help make it easier. Mint
can be a great application for tracking and planning your finances. All you need to do is link your credit card account and set a savings goal and date. The app allows you to set budgets and goals from a built-in list, including “get out of debt,” “retirement,” “buy a home,” “save for college,” “buy a car” and “emergency savings.” You can also request email summaries of your progress. Tally
is a mobile app with the main focus of helping users pay off credit card debt. It doubles as a credit card manager and automated debt tracker. Each month, Tally will provide you with a detailed payoff plan based on your credit card balances, due dates and interest rates. The month-to-month flexibility helps with any unexpected payments that may come your way. Choose your payoff method
There are a few effective , but the two primary techniques are the avalanche method and the debt snowball strategy. Each method is based on different theory — and the method you choose should be the one more likely to motivate you. Debt snowball strategy
The involves paying off the smallest bill first, then working your way up to the largest. Each time you pay off a bill, you reallocate the money you’ve been spending on that bill to pay off the next-smallest debt. The idea is to start with the quick win — the low-hanging fruit — and build momentum until you have it down to one big payoff. Avalanche method
The is based more on economic efficiency: making your money go as far as possible. With the avalanche method, you focus first on paying off the debt with the highest interest, then work your way down to the debt with the lowest interest. The less you pay in interest, this theory goes, the more you can put toward repayment of principal. Consider a balance transfer credit card
You may be reluctant to consider credit cards as a solution to your problem considering you may have accumulated debt on a credit card in the first place. However, can be an excellent financial tool to pay down credit card debt within a zero-interest period. These cards can help you save a significant amount of money on interest and fees and give you head start on tackling your principal debt (or even paying it off completely). Maximize your interest-free payoff timeline
The offers one of the longest interest-free periods available with a 21-month 0 percent intro APR on balance transfers made within four months of account opening (16.99 percent to 27.74 percent variable thereafter) — as well as a 0 percent intro APR for 12 months on purchases, followed by the same variable APR. Besides this, the card has a “no late fees” policy, meaning you won’t be charged a fee for making a late payment or even a penalty APR rate. The icing on top is the card’s lack of an annual fee. One notable drawback of the Citi Simplicity is its of 3 percent (or $5, whichever is greater), which is slightly higher than the typical 3 percent fee many balance transfer cards charge. You also won’t earn any rewards or welcome bonus, but it’s the price you pay for an exceptionally long intro APR offer. When evaluating balance transfer cards, be sure to include the balance transfer fee in your calculations, along with the amount you’ll be saving on interest payments throughout the zero-interest period, to determine the best option for you. Get long-term value from your card
If you’re interested in earning rewards while paying off debt, the offers a 15-month 0 percent intro APR on purchases and balance transfers (along with a balance transfer fee of 3 percent or $5, whichever is greater, in the first 60 days), 17.99% – 26.74% variable. After 60 days, that fee raises to 5 percent. The Freedom Unlimited earns you an unlimited 1.5 percent cash back on all purchases, making it a great . You also get 5 percent back on Lyft purchases (through March 2025), 5 percent back on travel purchased through Chase Ultimate Rewards and 3 percent back on dining and drugstore purchases. On top of all this, you won’t pay an annual fee, and there’s a first-year welcome bonus that tacks on an additional 1.5 percent cash back on all your purchases’ original cash back rate for the first 12 months, on up to $20,000 (exclusive offer through Bankrate). Just be careful to only spend what you can afford to comfortably pay off each month or hold off spending completely until you’ve paid off your credit card debt. For help choosing the right balance transfer card based on your ideal payoff window, you can utilize Bankrate’s . Simply enter your current credit card balances and interest rates and compare them with any potential new card details and fees. The bottom line
No matter what, be sure to prioritize throughout the process. If you don’t yet have an emergency fund, now to better protect yourself from the potential effects of a recession. Then, after your debt is paid off, to help prevent going into credit card debt in the future. SHARE: Claire Dickey is a product editor for Bankrate, and . Before joining Bankrate, Claire worked as a copywriter for brands within the telecommunications industry as well as a hybrid marketing and content writer. Cathleen's stories on design, travel and business have appeared in dozens of publications including the Washington Post, Town & Country, Wall Street Journal, Marie Claire, Fodor’s Travel, Departures and The Writer. Related Articles