7 tips for tackling your credit card debt, from someone who paid off $100,000 in 3 years (2024)

Paying off debt, whether it's a bigcredit card balanceor a personal loan, doesn't just happen overnight. Instead, it's something most people work toward for many months and years.

ForLynnette Khalfani-Cox,The Money Coach®and author of "Zero Debt: The Ultimate Guide to Financial Freedom," it took nearly three years — and a lot of self-discipline — until she paid off a whopping $100,000 in credit card debt.

"I used credit as a crutch and as a lifestyle tool,"Khalfani-Cox tellsCNBC Select. "When I didn't have money for something, I whipped out a credit card."

When Khalfani-Cox reached her early 30s, she started getting declined for purchases and new credit because her credit cards were maxed out. It was then that she realized her debt was a big problem.

She soon made it a point to finally get rid of her high balances and use her credit cards as a financial tool. "I had to learn to practice delayed gratification, save up for some things and plan my spending — without just thinking: 'I want it now, so I should get it now.'"

But Khalfani-Cox didn't pick up just one new financial habit while working to pay off the debt. Here are all the steps she took during her three-year and 6-figure debt payoff journey.

According toKhalfani-Cox, this was an important step in the process of getting out of debt. Before she got aggressive about her payoff plan, she was only making minimum paymentseach month.

"That was a debt trap and part of why I stayed in debt so long," she says. "Once I started making two and three times the minimum payments required, I was able to more quickly chip away at those bills."

Paying more than the minimum allows you to actually make a dent in your principal balance in addition to the interest accrued.

This was an easy step to take and one that helped Khalfani-Cox avoid the temptation of scoring a new credit card sign-up bonus and, thus, spending more.

"When you're already deep in debt, you just don't need that extra temptation," she says. To reduce the number of unsolicited credit card offers you receive, the Federal Trade Commission (FTC) says thatyou can opt out of receiving them for five years by calling toll-free 1-888-5-OPT-OUT (1-888-567-8688) or by visitingOptOutPrescreen.com, which are both operated by the major consumer reporting companies.

Khalfani-Cox knew that with each day that passed, interest accrued on her already high credit card balances. She decided to call her creditors and negotiate lower interest rates.

"I got all my credit cards down to either 0%, 2.9% or 4.9%," she says. This helped to significantly lower her payments, given that credit cards charge notoriously high, double-digit interest that can easily cause cardholders' debt to balloon.

To free up even more money to pay down her credit card debt,Khalfani-Cox looked at ways to lower the monthly payments on her other types of debt, including refinancing the interest rate on her auto loan.

Khalfani-Cox admits she was in denial about her high credit card debt — what's known as the "ostrich effect" in behavioral economics. She didn't think her debt was that big of an issue because she had consistent jobs, a six-figure income, a 401(k) and she paid all her bills on time (even if only the minimum).

When it finally came time to face her debt, she decided to list everything she owed in writing. "This was theeye opener that helped me realize how deep in debt I really was," she says. Writing it out and seeing her debt also helped Khalfani-Cox create a budget so she could allocate her money strategically. She found that she had to even make some tough financial choices, like changing where her kids went to school.

Today, Khalfani-Cox has six credit cards, including one a business credit card,and she says she generally pays off her balances in full each month. The only times she carries a balance is either for cash flow purposes or because she has an introductory 0% APR offer, thereby costing her no interest.

Credit cards offering a period of zero interest come in handy if you're not able to immediately pay off a new purchase on your credit card. And if you carry any credit card debt, look for one that offers 0% APR on balance transfers so that you can transfer your debt to a card that lets you chip away at your balance without accruing any additional interest.

TheU.S. Bank Visa® Platinum Card offers 0% interest for the first 18 billing cycles on both balance transfers and purchases (after, 18.74% - 29.74% variable APR). Balances must be transferred within 60 days from account opening. To get the most use out of this card, you would want to make sure you pay off your debt in those first 18 billing cycles so that you don't then end up accruing interest again.

After paying off her six-figure debt, Khalfani-Cox has since adopted what she calls a"Zero Debt mindset." She continues to follow the steps above to be more prudent in her credit card usage and to limit taking on any additional debt.

And even though she had to overcome a lot of credit card debt, she has never stopped using them (and still holds onto one she's had for nearly 20 years). Instead, she just got smarter about how to have them as a financial tool.

"Using credit cards regularly has helped me build an excellent credit rating, become more disciplined as a spender and also be more critical as a consumer," she says.