According to a report from the Federal Reserve Bank of New York Americas total credit card balance was $1.166 trillion in the third quarter of 2024, that’s up from $1.142 trillion in the second quarter. It is the highest balance since the New York Fed began tracking in 1999.

It is very easy to quickly accumulate credit card debt and once people reach a high debt level, they may feel overwhelmed and powerless to pay it off, but we all have the power to control our own financial situation. This may require reevaluating your spending habits and creating a financial plan to reduce spending and pay off your debt.

Here are some steps you can take to regain control and pay off your credit card debt.

Put the Card Away

Once you are buried in debt you need to put the credit card away and stop adding to the balance, setup a budget and eliminate all unnecessary expenses, differentiate your wants and needs. Food and rent are needs, streaming services, dinners out and entertainment are wants and can be eliminated or reduced until you are in good financial standing. Most credit card issuers compile a year-end summary report that categorizes what you are spending your money on, review the report to get an idea of where your money is going, this will help you decide which areas of spending are unnecessary.

Contact Your Credit Card Company

Call your credit card company and ask for a lower interest rate. Getting the rate reduced by even a few percentage points will help. Many providers are willing to lower your rate if they know you are actively trying to pay off your balance.

Some issuers offer a credit card hardship program, typically it is a payment plan that you setup with them, they may waive fees and lower interest for a certain period of time. Not all issuers offer this type of program but if yours does it is something worth investigating.

Research Balance Transfer Deals

Look for a reputable credit card that offers 0% intro APR. Transferring to a 0% APR credit card could help you save hundreds or thousands of dollars in interest and may help you get out of debt faster. Look for a card with no annual fees and low or no balance transfer costs. Most of these cards give you 12-18 months of no interest so work hard on paying off your debt during that time.

Any Amount Will Help

Don’t get discouraged if you have a large balance, the worst thing you can do is give up and stop making payments or pay only the minimum amount. Look for ways to eliminate spending and take the money you are saving and put it toward your debt.

Look For Ways to Earn Extra Money

Look for ways to earn extra money, this could be a part time job or selling unneeded possessions or even moving to a less expensive home or rental. Any additional money you bring in can help you get out of debt faster.

Pay with Cash

Paying with cash will eliminate paying interest, which is a huge part of credit card debt, it also makes you more aware of your spending. If you don’t have the cash to pay for it, you don’t buy it.

Use Any Extra Money

Use any extra money you come into to pay off the debt, this can include income tax returns, salary increases, inheritance money, and work bonuses.

Debt Snowball & Debt Avalanche Method

If you have multiple credit cards, you might consider either the debt snowball or debt avalanche methods of payment. The snowball approach involves paying off the smallest cards first and then moving on to the next smallest until you have paid them all off. The Avalanche method is when you pay off the card with the highest interest rate first and then move on to the next card with the highest rate until you are debt free.

Just like you tune-up your car, consider giving your finances a tune-up a few times a year.

Whether your goal is to pay off debt, build savings, or just spend more carefully, here are some tips to help you get started.

Evaluate Your Spending Habits

Review your spending habits over the previous few months, look for areas where you may be spending too much money and areas where you can cut back. Review recurring expenses like subscription services, cell service, and memberships and decide if you can eliminate some of those expenses or switch to something less expensive. Review expenses like entertainment and eating out and instead look for free or less expensive entertainment and meal options, even little changes can save money.

Review Your Budget

If you don’t have a budget setup, consider doing so, a budget helps keep you on track and shows you where your money is going and it builds a foundation for financial accountability and stability. Allocate money for all of your necessary monthly expenses like housing, utilities, groceries, and transportation while also setting aside money for savings, retirement and debt repayment.

Review Your Bills

Call your cable company, cell service provider and internet provider to negotiate a lower fee or obtain promotional offers or other discounts to reduce your monthly payment. With so much competition in the market service providers are often willing to work with you to reduce costs. Call your car and homeowners insurance companies to review your policies and find a better rate, shop around with different insurance companies if your current provider is too expensive or unwilling to negotiate a lower rate. If you don’t currently bundle your policies, consider doing so because you often receive a lower rate when bundling. If your credit score is poor take steps to raise it, you receive better rates on insurance and other services with a good credit score.

Automate Your Savings

Make savings a priority, setup automatic transfers from your checking to your savings, each time you get paid deposit a set amount into savings. You won’t have to remember to transfer the money and you will build wealth overtime. If you do not have an emergency account setup, make this part of the plan. You should have 3-6 months of income set aside for unexpected expenses.

Pick The Right Time to Buy

When you are considering making a purchase, take advantage of end of year or end of season sales. Spring, summer, winter and fall all come with their own discounts, for example you might get a better deal on a lawn mower or outdoor grill if you buy them in the fall when the summer season has ended. After holiday sales are the perfect time to stock up on items for next year, after Christmas you can get great deals on wrapping paper, greeting cards and holiday decorations.

Try DIY

You can save money by doing things yourself, if you pay for lawn service, cleaning service and minor household repairs consider doing those chores yourself. General home maintenance is something you can easily learn to do. YouTube is full of useful videos on almost every subject.

Pay As You Go

Credit card debt can be a problem for some, if you struggle to pay off your credit card each month make it a rule to pay for some expenses like groceries and gas with cash or a debit card instead which will hold you accountable and help you stick to your budget without accumulating additional debt.

Pay off Credit Card Debt

Credit card debt is often the most expensive type of debt. Make it a priority to pay it off.

Review Your Investment Mix

Review your retirement plan and other investment mix, depending on your age or how close you are to retirement and the standing of the current market you might need to adjust your holdings. If you have an employer sponsored retirement plan that offers a match, try to contribute the maximum amount so you are not leaving free money on the table.

Review Beneficiaries

Review the beneficiaries on your accounts, especially if you have had any recent changes such as a divorce, marriage, birth, adoption, or death. Make sure the designated beneficiaries on your financial accounts, insurance, retirement accounts and other holdings are up to date.