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If you’re drowning in credit card debt, this is your lifeline.
I’m sharing the five strategies that can help you pay it off by the end of this year — and stay out of it for good. From slashing your interest rate to my favorite debt consolidation tool, these steps can save you thousands and give you your financial freedom back.
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Transcript:
Tori Dunlap:
I can help you pay off your credit card debt by the end of this year.
This video can help you pay off your credit card debt by the end of this year.
Watch this video if you wanna be credit card debt free by the end of this year.
Hi, I’m Tori. I’ve helped over 5 million women be better with money and today we are talking about credit card debt, how to get out of it, how to stay out of it, and the five tools that you need in order to sustainably pay off your debt in a way that doesn’t make you hate your life.
First, I gotta explain how credit card debt works because it’s very unique compared to the other kinds of debt, and it’s probably what’s keeping you in that cycle is not understanding how it works. Just like every other kind of debt, credit card debt is made up of two different things.
Your principle and the interest. Your principle is the original amount of money you took out. So if you put a thousand dollars on a credit card and didn’t pay it off, that’s your principle. That a thousand dollars, the interest is what it’s charging you to be in debt. It’s the cost of putting money on the credit card and not paying it off.
The first reason that credit card debt is different is that interest rates are really, really high. The average student loan rate in the country right now is anywhere from like four to 7%. The average mortgage right now is six to 7%, but the average credit card is 22% interest. So we’re seeing interest rates.
That start at 15% for credit cards and go all the way up to 30% interest. This is why credit card debt feels like you’re drowning is because the interest rate is so high, the second reason credit card debt is different is that it compounds meaning that your interest earns interest, earns interest. Another reason why you’re trying to dig yourself outta the hole, but the sand keeps falling in. And the final reason credit card debt is different than other kinds of debt is it not only compounds, it compounds daily.
So not only is your interest earning interest, but every day you stay in credit card debt, it gets harder to get out of. So that’s why you need to take action on your credit card debt today.
Let’s talk about the five ways you can actually pay your debt off. Number one, in addition to your payments that you’re making already. Add any additional extra money to just the principal balance. So what I mean by this is if you’re paying. $200 a month on your credit card bill already, and you get an extra $50.
You don’t go out to eat once you get money on your birthday and you have $50 extra. We don’t wanna just put it towards the general cost of the debt because it’s the principle and the interest, right? We wanna make sure the principle goes down because if the principle goes down. We save money, we’re not paying as much an interest.
So you’re gonna call your credit card company and see if you can do this. See if you can just contribute that extra $50 towards lowering the principal amount. Number two, this is my favorite strategy, especially if you have 10,000 plus dollars worth of credit card debt, or if you’ve been in debt for a long time.
We’re talking six months, a year, multiple years. Consolidate your debt. The reason consolidation is so impactful, especially with the tool we recommend it’s linked down in our bio, is that consolidation is going to allow you to make one flat monthly fee where the interest does not compound.
It definitely doesn’t compound daily. We are seeing members of our community save hundreds, if not thousands of dollars in interest and cutting their loan time in half using this method because if the interest is a lower interest rate, we’re seeing people go from that 22 or 24% interest to 12% interest or uh, 10% interest.
You’re not only saving a ton of money. You’re saving all of that interest, but you’re also saving so much time on your loan. You’re paying your credit card debt off rather than in four years, in two, or in a year and a half. The consolidation tool we recommend has a five star rating on NerdWallet, and it also doesn’t impact your credit at all to just check. So every single person watching this video check to see if you qualify and if the interest rate is lower than what you’re paying right now and the terms are more favorable, it might be a really good idea to get this loan terms apply. It’s different for every single person, but again, you can check down below without hurting your credit to see if this makes sense for you.
Three, call and negotiate your interest rate down. If you want a similar strategy. With less of a guarantee, you can call your credit card company and see if they will lower your interest rate for you.
We’ve seen tons of people in our community be successful in taking their interest rate from that 25% to maybe 22%. And I know you’re thinking, okay, that’s not a lot. Why would I do that? You’re saving money on interest. So here’s your script. You’re gonna call and you’re going to mention some sort of financial hardship.
Maybe it is losing your job, maybe it’s being impacted just by the cost of everything right now in inflation. And you’re gonna ask them if there’s anything they can do for you. So this is my financial hardship. This is the way I’ve been impacted. Is there anything you can do for me to help lower my interest rate?
If they say no, you’re gonna politely ask again. You’re gonna say, is there anything you can do to help me navigate using this credit card more successfully?
And see what options they give you. Number four. You knew this was coming, but I need you to audit your budget. One of the hardest things to do is get outta credit card debt while you’re putting yourself back into it.
We need to understand what we’re actually spending our money on and making sure that our spending aligns with our values. So I need you looking at your numbers. I need you looking at your budget to determine, yep, these are the things I value. These are the things I can afford. These are the things I need to cut.
And finally number five, I’m gonna teach you how to properly use a credit card so that this doesn’t happen again. One we’re spending within our means and we’re paying off our debt every single month in full and on time. We also wanna do our best to keep our balance under 30% of our total credit line.
So if your credit card offers you a $10,000 credit line, we wanna be spending $3,000 or less per month. Why? Well, it’s gonna boost your credit score because part of your credit score is what’s called your credit utilization rate. If you’re utilizing 30% or less of your total credit, it’s gonna increase your credit score.
These are five ways to help you pay off your credit card debt by the end of this year. And one of my favorite fixes for immediate relief is checking to see if you qualify for loan consolidation.
You can find all of the info down below. Thank you for being here and if you liked this video, I would love for you to subscribe. We have so much free content around how to save your first a hundred K, how to pay off credit card debt, student loan debt, as well as how to invest in a sustainable way. We’ll see you back here soon.
Thank you for listening to Financial Feminist a Her First $100K podcast. For more information about Financial Feminist, Her First $100K, our guests and episode show notes, visit financialfeministpodcast.com. If you’re confused about your personal finances and you’re wondering where to start, go to herfirst100k.com/quiz for a free personalized money plan.
Financial Feminist is hosted by me, Tori Dunlap. Produced by Kristen Fields and Tamisha Grant. Research by Sarah Sciortino. Audio and video engineering by Alyssa Midcalf. Marketing and Operations by Karina Patel and Amanda Leffew. Special thanks to our team at Her First 100K, Kailyn Sprinkle, Masha Bakhmetyeva, Sasha Bonar, Rae Wong, Elizabeth McCumber, Daryl Ann Ingman, Shelby Duclos, Meghan Walker, and Jess Hawks. Promotional graphics by Mary Stratton, photography by Sarah Wolfe, and theme music by Jonah Cohen Sound. A huge thanks to the entire Her First 100K community for supporting our show.
Tori Dunlap
Tori Dunlap is an internationally-recognized money and career expert. After saving $100,000 at age 25, Tori quit her corporate job in marketing and founded Her First $100K to fight financial inequality by giving women actionable resources to better their money. She has helped over five million women negotiate salaries, pay off debt, build savings, and invest.
Tori’s work has been featured on Good Morning America, the New York Times, BBC, TIME, PEOPLE, CNN, New York Magazine, Forbes, CNBC, BuzzFeed, and more.
With a dedicated following of over 2.1 million on Instagram and 2.4 million on TikTok —and multiple instances of her story going viral—Tori’s unique take on financial advice has made her the go-to voice for ambitious millennial women. CNBC called Tori “the voice of financial confidence for women.”
An honors graduate of the University of Portland, Tori currently lives in Seattle, where she enjoys eating fried chicken, going to barre classes, and attempting to naturally work John Mulaney bits into conversation.
