Credit Card Debt: Why is it Hard to Pay Off?

If you struggle with credit card debt or have a close family member or friend who does, you know they didn’t get into debt overnight. 

Credit card debt is often accumulated with small purchases here and there that go unpaid over the course of months. Just as it didn’t accrue at once, it usually can’t be paid off at once either. 

Credit card debt is hard to pay off for many reasons, but perhaps the most influential reason is that it requires commitment and dedication to the long-term goal, even when you might not see short-term results.

I’ve been coaching Rule #1 investors on how to commit to changing their financial situation for the better for a few decades now, and making the initial commitment to the process is always the most important part. 

When you commit to becoming debt-free, it will become your priority. It will mean more to you than going on vacation or buying that new car.

If you just winced at the thought of skipping out on a vacation in order to get out of debt, you’re not in the right mindset yet, but trust me, you can get there! I’m going to walk you through how to pay off credit card debt so that you can see the light at the end of the tunnel. 

When you see it and believe it’s there, you’ll be able to make progress on paying off credit card debt and begin to grow your wealth.    

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How To Pay Off Credit Card Debt Fast

The average credit card debt for millennials is $4,322, and for generation X is $7,155. With staggering interest rates, these debts can easily accrue between $50 and $100 in interest per month, making them harder and harder to pay off over time. 

This is one of the reasons why it is so hard to pay off credit card debt — it just keeps growing — and why it’s crucial to pay off fast. 

Here are seven steps to help you pay off credit card debt fast so you can start building real wealth. 

Step 1: Commit to Becoming Debt-Free

Getting out of debt isn’t easy, so you have to make a commitment to yourself to stick with it. This is step one. 

You have to be willing to make sacrifices along the way to see your accounts hit zero. 

It’s not going to be easy, but if you go in and remain focused on becoming debt-free, you can do it. 

Step 2: Set Financial Goals 

It will be much easier to stick to your commitment to pay off credit card debt if you can envision what you will do when the debt is paid off. 

So set some financial goals for yourself or for your family. 

Perhaps when you’re done paying off credit card debt you’ll put all the money you were putting toward your debt toward funding a family vacation, or toward investing in your kid’s college fund.  

Step 3: Stop Comparing Yourself to Others

Keeping up with the Joneses (or whoever you follow on Instagram) is probably how you got into credit card debt in the first place. 

This is going to have to change if you want to pay off credit card debt fast. You’ll need to stop seeing other people post about their ski trip or setting a personal record on their Peloton. 

It doesn’t matter what anyone else is spending their money on. Your main focus should be you.

You may even have to start declining some offers to go out to eat at that (pricey) new restaurant or attend that wedding in Mexico. 

Get good at saying “No.” You can really kill yourself (and get into more debt) by trying to impress people who really don’t care that much one way or the other.

Step 4: Cut Your Spending

You have to cut back, at least for a while if you want to get out of credit card debt and spend your money wisely. Mainly, you need to stop using your credit cards. 

You can’t pay off credit card debt while adding to the balance daily. Swap to using cash or a debit card while you work to get out of debt. 

In order to actually cut back, you need to take a look at your statements and figure out what you’re spending money on each month. 

Separate living expenses, such as groceries, water, rent, and electricity from discretionary expenses, such as eating out, shopping, gym memberships, etc. 

Eliminate as much as you can from the discretionary category so you can start putting more money towards paying off debt. 

Step 5: Create a Budget

If you’ve never created a budget, now is the time to do so. 

You need to know how much money you have coming in and how much you spend on living expenses in order to know how much you can put toward paying off credit card debt. 

A budget won’t work if you don’t create a budget that you can stick to. So, be realistic about what you spend.

If the reason you’re in debt is that your income doesn’t cover your expenses, consider working overtime at your current job for extra pay, or getting a side-gig in order to increase your income. 

There are plenty of ways to make extra money, so find one that works for you and start putting that additional cash towards paying off your credit cards.

Step 6: Adapt Your Lifestyle 

The hardest part of getting out of debt is changing your lifestyle. Remind yourself that minor changes to your spending habits today will help you get out of debt faster and reach your future goals. 

If you’re in a serious amount of credit card debt and can’t afford your living expenses and make payments on your debt at the same time, you may need to make some more drastic lifestyle changes. 

Look at your largest expenses, which are likely your rent or mortgage and your car payment or insurance costs.

Can you move to a smaller place? Can you sell your car and take public transportation or drive a cheaper car? 

If you find that you are living in a city and the only place you can afford without debt is dangerous, think about moving to a small town.

There are plenty of towns nationwide where there are jobs, the cost of living is cheap, and the neighborhoods are safe. You have to think outside the box.

Adjusting your lifestyle in these ways can have an enormous impact on the bottom line of your budget. 

Step 7: Pick a Debt Payoff Strategy

Before you look into credit card debt relief or settling credit card debt with your bank, you should know that those avenues will hurt your credit score. Instead, do the work to pay off credit card debt on your own. 

There are three popular debt payoff strategies that won’t hurt your credit and can help you pay off credit card debt fast. 

The first is the debt snowball method, which focuses on paying off your lowest amount of debt first. This method can be extremely motivating if you have multiple debts with small balances as you’ll check off debts quickly.

The second method is the debt avalanche, which focuses on paying off your debt with the highest interest rate first. This method can save you money on interest.

Whether you pick this method or the debt snowball, make sure you’re at least paying the minimum payment due on all of your credit cards to avoid late fees.   

The final method can help you avoid paying interest altogether. Sign up for a balance transfer credit card with an introductory 0% interest rate and transfer all of your current credit card balances to the new card.

Then, start making payments on your debt without collecting additional interest on the balance while you do.  

Invest In Your Future

Credit card debt can be crippling to you and your wallet, but it also makes it impossible to invest. Even if you’re investing and making a 15% annual return on your portfolio, if you’re paying 18-20% on your credit card debt, sadly, you’re still losing 3-5% a year. 

Compounding interest may help you as an investor, but as a debtor, it hurts you greatly. This is why it’s so important to learn how to pay off credit card debt fast.

Follow these seven steps to successfully pay off credit card debt so that you can start to invest. Then, you will see how compounding interest works in your favor as it helps make you a lot of money.  

To help you along on your journey to becoming debt-free, I’ve created a 12-month Financial Success Planner. Grab yours today and use it to stick to your commitment and achieve your financial goals next year.