If you have credit card debt, you know. The high interest rates, the constant anxiety, the feeling you’ll never escape…
But today’s the day that’s all going to change. It’s time to finally pay off your credit card debt and live your life with a little less money stress by committing to this 21-day debt payoff challenge.
You ready? Follow these steps to finally conquer your credit card debt:
Day 1: Freeze Your Credit Cards
No, we’re serious. Literally freeze your credit cards.
If you want to get serious about paying off your credit card debt, you’ll want to stop using your cards — at least until you can pay down your balance and temper your spending.
So grab a container from your cupboard, fill it with water, drop your credit cards in, and pop it in the freezer. No more spending temptations. Now you’re ready to get serious.
Day 2: Know What You Owe and Prioritize Your Debt
One of the toughest parts about paying down your debt is simply knowing where to begin. Which of your credit cards has a balance? Carries the highest interest rate? Has the highest minimum monthly payment?
That’s where a free website like Credit Sesame can help. It takes two minutes to sign up and access your free credit score. From there, Credit Sesame will outline your debt — exactly what you owe and to whom — and offer personalized recommendations. It’ll even break down the interest rates and minimum monthly payments.
Armed with this intel, you’ll be able to more easily devise your payoff plan. Do you want to use the debt avalanche method, where you’ll pay off the cards with the highest interest rates first? Or maybe you prefer the debt snowball method, where you start with the smallest balances first.
You can continue to use Credit Sesame to keep track of your progress and hold yourself accountable throughout this challenge. And, hey, it’ll be kind of fun watching your credit score react to all your hard work!
It takes two minutes to get started with Credit Sesame.
Day 3: Ask This Website to Pay Your Credit Card Bills This Month
The truth is, your credit card companies are probably ripping you off with high interest rates. This is likely what’s held you back from making any real payoff progress in the past.
But today things are about to change, because a website called AmOne wants to help.
If you owe your credit card companies $50,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.
The benefit? You’ll be left with one bill to pay each month (much more manageable). And because personal loans have lower interest rates (AmOne rates start at 3.99% APR), you’ll get out of debt that much faster.
Plus: No credit card payment this month.
AmOne won’t make you stand in line or call your bank, either. And if you’re worried you won’t qualify, it’s free to check online. It takes just two minutes, and it could help you pay off your debt years faster.
Days 4-5: Build a Sustainable Budget
Now it’s time to build yourself a budget. We’re giving you two days for this because we get it: This can be overwhelming.
Oh, yes, we hear your groaning from here, but budgeting is an integral part to paying off your credit card debt, and it’ll help you accomplish your financial goals. Plus, it doesn’t have to be that difficult.
We suggest using the 50/20/30 budgeting method. It’s easy and offers a lot of flexibility. Here’s what it looks like:
- 50% of your monthly income goes toward living expenses. These include rent, mortgage, utilities, groceries, car payments, gas and loan payments.
- 20% of your monthly income goes toward money goals, which can include investments, savings and debt-reduction payments above the minimum amount.
- 30% of your monthly income goes toward personal spending. That’s everything else.
Because you want to pay off your credit card debt, you’ll want to focus on building your minimum payments into that 50% category. Then any additional efforts will get wrapped into the money goals category.
If you’re struggling to make your expenses fit perfectly into each category, feel free to adjust the proportions. Like we said, this is super flexible, so use it to suit your needs and hit your goals.
Day 6: Reward Yourself With a Free $5 Amazon Gift Card
Whew, you’re making good progress so far! We know this isn’t always the easiest, so give yourself a little break today. You deserve it, and the last thing you want to do is burn yourself out.
While you’re posted up on the couch and watching the latest Netflix comedy special, go ahead and claim a free $5 Amazon gift card. Yup — a treat yo‘self gesture and a way to add a little more room to your budget next week.
All you have to do is go to a website called MyPoints (you can do this from your phone, too), and take five surveys. You’ll answer answer questions about different products and services you use, and in return MyPoints will give you free gift cards.
To date, the research company has paid people more than $236 million in gift cards.
To get your $5 Amazon gift card, just sign up (it takes seconds), and complete your first five surveys.
Build this into your routine, and you might be surprised how many gift cards you can get to help offset some of your monthly spending, leaving you more room to tackle that debt.
Day 7: Stop Wasting Money on Your Monthly Bills
With a budget in place, you’ll be able to take a good look at your recurring monthly bills. Where can you save money? To get started, one of the simplest — and most impactful — expenses you can cut is car insurance.
If you really want to get the best price on car insurance, experts say you should be shopping twice a year. But who has time to do all that?
Thankfully, a free website called The Zebra will do the shopping for you — in just two minutes.
All you have to do is enter basic information about your car and driving history, then The Zebra compares policies from more than 100 companies to find you the best price.
The Zebra says it saves its users up to $670 a year. That’s an extra $670 you can use to finally pay off your credit cards.
If you find a policy you like, you can sign up online instantly.
Now that car insurance is out of the way, start shopping other options for your home insurance, your cable/internet bill and your cell phone bill.
Day 8: Swap Your Grocery Receipts For Free Gift Cards
Paying off your debt doesn’t always require grand gestures. Every little bit counts.
A free app called Fetch Rewards will actually turn your grocery receipts into gift cards. It partners with tons of brands to give you points for every grocery receipt you share. Then you can exchange them for gift cards.
All you have to do is send Fetch a photo of your receipt (from any grocery store), and it does everything for you. No scanning barcodes or searching for offers.
When you download the app, use the code PENNY to automatically earn 2,000 points when you scan your first receipt. Then start snapping photos of your recent receipts to see how many points you can earn without a single trip to the store.
Not so bad for a useless receipt, right? These gift cards can help offset some of your other spending so you can focus on paying off your debt.
Days 9-16: Commit to a “No Spend” Challenge
You’re making good progress so far! Now it’s time to really pour fuel on this fire by committing to a week of no spending.
That means you won’t spend any money on nonessentials this next week. Definitely still pay rent, your utilities — all those responsible grown-up bills — but don’t spend anything on entertainment, clothes or dining out.
Yes, this will be difficult, and you will face temptations. But this is a great way to reset your spending habits and save up some extra money to put toward your debt.
If you’re feeling really ambitious, you can go for a full month, like personal finance writer Jamie Cattanach. She committed to a No Spend November, to help tame some of her holiday spending. When Cattanach finished her challenge, she saved more than $600. Not bad, right?
Day 17: Implement This Trick Into Your Routine to Get Checks in The Mail
Chances are you do at least some of your shopping online. And, chances are, you’re leaving money on the table — money you could be putting toward your debt.
Whether you’re ordering pet food from Amazon, stocking up on toilet paper from Walmart or even booking a flight for the holidays, you can earn a check back through a free website called Rakuten.
Rakuten has the hookup with just about every online store you shop, which means it can give you a kickback every time you buy. In fact, since Colleen Rice started using Rakuten, it’s sent her checks in the mail totaling $526.44.
It takes less than 60 seconds to create a Rakuten account. All you need is an email address, then you can immediately start shopping your go-to stores through the site.
Plus, if you use Rakuten to earn money back within the first 90 days of signing up, it’ll give you an extra $10 on the first check it sends you. This is an easy way to boost your income without putting a whole lot of work into it.
Days 18-20: Make an Extra $15/Hour to Pick up Milk For Your Neighbors
Sometimes when you’re trying to pay off a large sum of debt, the most impactful thing you can do is boost your income. But who has time for a second or third job? We’re all tired, but that’s where getting a flexible side gig can help.
Take a couple days to explore your options, but here’s one option we like: Deliver groceries through Postmates.
With the Postmates app, you can get paid to grocery shop. You choose when and how much you work. And if you’re in a pinch for money? You can cash out instantly after each delivery.
Holly Gaston, of San Francisco, California, has tried plenty of side gigs. With Postmates, she makes an average of $15 an hour. Plus, she says it’s been much more enjoyable than any of her previous side gigs.
And because Postmates is so flexible, this isn’t something you have to do forever. Plan on trying it out for a month and see how much money you can make. Even that could help get you on track.
What do you have to lose? Signing up shouldn’t take more than about three minutes.
Day 21: Keep It Going!
Whew! You’ve almost completed the challenge. How are you feeling? You should be proud of yourself for committing to pay off your debt.
Now that you’re done, the key is to keep it going. While you celebrate today, think about how you’d like to keep yourself accountable and on track. Here are a couple ideas we have:
- Start bullet-journaling. If you’re crafty and creative, this hobby can be a major stress-reliever — and it can help you stay on track and visualize your debt-payoff progress. You can track your spending, your savings and your debt. If you’re curious what this will look like, do a quick Pinterest search.
- Set up a rewards system. We all need some motivation, so each time you pay off a credit card or a specific amount of debt, reward yourself. Treat yourself to dinner out, or give yourself a day off and go to the beach or park. Heck, it could be as simple as pouring yourself a glass of wine and indulging in reality TV. Do whatever motivates you (but doesn’t drain your bank account).
The key to long-term success is to not burn out, so be nice to yourself and celebrate even the smallest wins. Just think about how good it’ll feel when you pay off that final credit card balance!
Carson Kohler ([email protected]) is a staff writer at The Penny Hoarder. She’s rooting for you!