Steps to paying off credit card debt

Reach a zero balance on your credit cards with this simple, step-by-step guide.

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Digging your way out of credit card debt is a huge accomplishment. Not only will it help keep money in your pocket every month, but it could also help raise your credit score. Getting to that point, however, takes commitment and a clear action plan.

Credit card debt is considered “bad debt” because it typically comes with extremely high interest rates, no appreciating assets (unlike a loan on a house, where the house value may increase — or appreciate — while you live there) and minimum monthly payments that are so low that it could take several years to pay off your card.

Paying down credit card debt may help improve your credit score. Thirty percent of your credit score is determined by how much you owe. In addition, if you’re looking to get a loan — like for a car or house — lenders look at the amount of debt you have compared to your monthly income, known as your debt-to-income (DTI) ratio. While things like buying a house may not be on your radar now, after graduation it may become a priority, and credit scores can take a while to improve.

Ready to start paying down your balance? Follow these simple steps to take control, once and for all.