April 29th, 2011

Spring Cleaning Your Credit Card Debt: Choose Your Own Repayment Adventure

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This week is Credit Karma Spring Cleaning week! We’ll be blogging all week about spring cleaning tips related to your finances and the rest of your life.

Remember the “Choose Your Own Adventure” books you read as a kid? At the end of each chapter, the hero or heroine had to make a choice, and you got to make the decision by turning to one page or another. You held the protagonist’s fate in your hands.

Deciding what to do with your debts can feel like that: From several options, you choose a strategy to pay back your debt and watch your fate unfold as you take action. But unlike the “Choose Your Own Adventure” books, the fate of your credit health shouldn’t be a gamble. Consider which debt repayment strategy is right for you before simply turning the page and taking action.

Earlier this week, we talked about debt repayment strategies for different debt categories. Credit Karma users have an average credit card debt of $6,800 and six open credit card accounts.

If you’re facing the same debt dilemma, here are some strategies for debt repayment, from the basic to the extreme. Choose your own repayment adventure and watch your debt shrink.

Choose to Stop Saving

I know what you’re thinking. And, yes, saving money is very important when it comes to being prepared for financial emergencies. But while you’re paying back your credit card debt, not contributing to your emergency savings account in order to pay more towards your debt is an option.

The APR on your credit card (or cards) is most likely higher than the interest rate on your savings account, so paying off your debt before saving more makes sense. You’ll be losing more money by keeping that credit card debt than you’ll be making in interest on your savings account. As soon as you’ve crawled out from under your credit card debt, start saving again, and don’t get tempted to repeat your credit card habits.

Choose to Get (Free) Help

If you think it’s too complicated to figure out how to deal with multiple debts, think again. ReadyForZero helps you manage your credit card debt payments by setting up a customized repayment plan for free. It collects debt information from your credit card accounts and evaluates your balances, taking into account each card’s interest, minimum balance, and total debt to assess the best strategy for paying back your debt.

You can set up calendar reminders on ReadyForZero so that you’ll be alerted to pay your bills and even share your debt repayment via email with a trusted friend or family member.

Although ReadyForZero can’t enforce your debt repayment, it’s a useful tool when it comes to managing several credit card debts in one place and finding the smartest strategy for repayment on each one.

Choose a Balance Transfer Credit Card

When you already have credit card debt, it’s counter-intuitive to open a new credit card. But used wisely, a balance transfer card is a great tool for credit card debt repayment. Once your balance is transferred from your existing cards to your new one, you’ll begin paying back your debt at a lower interest rate and have the convenience of making one payment instead of several.

The best balance transfer credit cards have an introductory 0% APR on balance transfers and purchases for six to 18 months. Your credit score will take a hit from the hard inquiry during the application process, but it will be worth it if you stay on top of your bill payments. The new credit limit will also add to your overall available credit, lowering your credit utilization rate.

As you repay your debt on your balance transfer card, be sure not to let the 0% APR on purchases tempt you to spend on your new card. For suggestions on the best balance transfer cards, read more about what Credit Karma users are saying.

Choose Debt Consolidation

As a last option, you may choose to consolidate your debt from several cards into one loan repayment. With debt consolidation, you make a single monthly payment, typically at a reduced amount. If your debt is too much for you to handle, debt consolidation could help. Avoid debt consolidation scams by choosing a do-it-yourself method. See our previous post on the steps you need to take to contact your creditors and discuss your consolidation options.

Bottom Line: It’s easy to feel hopeless when it comes to credit card debt repayment. Choose one of these tools, and you’ll be on your way to being debt-free.

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.


  1. This article is very helpful and informative. Thanks for the info. I also found a great article on protection for college students against accruing credit card debt if you are also interested in reading.

    Abin at 6:42 am on May 5, 2011

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