How to Get Out of Debt: Three Popular Methods to Try

Maybe nobody ever sat you down and taught you how to budget. Maybe a divorce, a layoff, or the cost of putting yourself through school left you leaning on credit cards longer than you meant to. Whatever brought you here, there's no judgment in this space — only a plan.

If you're carrying debt and feeling a little stuck on where to start, you're far from alone. In fact, I became saddled with credit card debt in the 20s after I was laid off from a job in telecomm after the tech bubble burst.

That's why I'm empathetic when I talk to women in every stage of life who are managing a credit card balance, a personal loan, or medical debt. The good news is this: debt is solvable. It just takes an honest look at the numbers and a strategy that fits how you actually think about money.

This article walks through why high-interest debt is worth tackling sooner rather than later, three well-tested methods for paying it down, and a few ways to speed up your progress once you've picked your approach.

Why It's Worth Getting Out of Debt: The Real Cost of Carrying a Balance

Carrying a balance on high-interest debt, credit cards especially, can cost you far more than the number on your statement suggests. Interest compounds, which means you're often paying interest on interest. Here's a simple example of how quickly that adds up:

Say you have a credit card balance of $5,000 at a 20% annual percentage rate (APR), and you're making the minimum payment of $100 a month.

• Month 1: Opening balance of $5,000. Interest for the month comes to about $83.33. After your $100 payment, your new balance is $4,983.33.

• Month 2: Opening balance of $4,983.33. Interest comes to about $82.72. After your $100 payment, your new balance is $4,966.05.

Notice what happened there. Over two months, you paid $200 total, but only about $34 of it went toward your original balance. The rest covered interest. The longer a balance sits, and the closer you stay to the minimum payment, the harder it becomes to make real progress, especially if new charges keep getting added.

If that example lit a fire under you, good. Before you choose a strategy, there are three things worth doing first:

• List out every debt you're carrying, including the balance, interest rate, and minimum monthly payment. You can't build a real payoff plan without knowing exactly what you're working with.

• Take an honest look at your income and expenses so you know how much you can realistically put toward debt each month, beyond your essential living costs.

• Pause new credit card charges while you work through your existing balances, so you're not filling the bucket while you're trying to empty it.

Three Methods for Paying Down Debt

The Avalanche Method

With the avalanche method, you pay off the debt with the highest interest rate first. You make minimum payments on everything else, and every extra dollar in your budget goes toward that highest-rate balance. Once it's paid off, you roll that payment amount into the debt with the next-highest rate, and so on.

• The upside: This method typically saves you the most money over time, because you're eliminating your most expensive debt first.

• The trade-off: If your highest-interest debt also happens to carry a large balance, it can take a while before you feel real momentum, and that slower start is where some people lose motivation.

The Snowball Method

The snowball method flips the order. Instead of interest rate, you focus on balance size, paying off your smallest debt first regardless of its rate. Once it's gone, you take the money you were putting toward it and apply it to the next-smallest balance, building momentum as you go.

• The upside: Quick wins. Watching a balance disappear entirely, even a small one, provides real psychological motivation to keep going.

• The trade-off: Because you're not prioritizing interest rate, this approach can cost you more in total interest compared to the avalanche method.

The Consolidation Method

Consolidation means combining several smaller debts, often credit cards, into a single balance, usually through a balance transfer offer with a lower introductory rate or a debt consolidation loan. Instead of juggling several payments and due dates, you make one payment each month, ideally at a lower interest rate than you were paying before.

• The upside: Simplicity. One payment is easier to manage, and a lower rate means more of your payment goes toward the actual balance instead of interest.

• The trade-off: It can be tempting to make only the minimum payment on your new, consolidated balance instead of continuing to pay what you were paying across your separate debts. Watch the terms closely, too. Missing the deadline on a promotional rate can bump you to a much higher one as a penalty.

Ways to Speed Up Your Progress

Once you've chosen a method and you're moving, a few additional strategies can help you get to zero faster.

• Increase your income. Part-time work, freelancing, a seasonal gig, or selling items you no longer use can all create extra cash you direct straight toward debt. Even a modest amount applied consistently accelerates your timeline.

• Consider a credit counseling service. Nonprofit credit counseling agencies can help build a structured plan and sometimes negotiate lower rates or fees with your creditors on your behalf. Read the fine print on how they're compensated before signing up.

• Negotiate directly with your creditors. It's often in a creditor's interest to lower your rate rather than risk not being paid at all. A quick phone call, especially if you have a track record of on-time payments, can sometimes result in real savings.

• Start a small emergency fund alongside your debt payoff. Setting aside even $1,000 while you pay down debt can keep an unexpected expense from landing right back on your credit card. Once your debt is paid off, you can build that fund up to three to six months of expenses.

Whichever strategy you choose, the most important step is the first one. The sooner you start, the sooner the compounding starts working in your favor instead of against you.

What You're Probably Wondering

Which method should I actually choose: avalanche or snowball?

It depends on what will keep you motivated. If you're disciplined by nature and want to minimize total interest paid, the avalanche method is mathematically more efficient. If you tend to need visible progress to stay engaged, the snowball method's quick wins may keep you going longer. The best method is the one you'll actually stick with.

Will paying off debt hurt my credit score in the short term?

Generally, paying down balances helps your score, since it lowers your credit utilization ratio, one of the biggest factors in your score. Closing a paid-off account entirely can have a small, temporary effect on your score by reducing your available credit and average account age, so it's often better to keep an old account open, even at a zero balance, once it's paid off.

Is a balance transfer card a good idea?

It can be, if you have a realistic plan to pay off the balance before the promotional rate ends. Read the terms carefully, including the transfer fee (often 3–5% of the balance) and what the rate jumps to afterward. A balance transfer only helps if it's paired with a genuine payoff strategy, not just a way to buy time.

Should I stop contributing to retirement while I pay off debt?

Not entirely, if you can help it. If your employer offers a 401(k) match, try to contribute at least enough to capture it. That match is essentially free money, and pausing it can be more costly long-term than the interest you're paying on moderate-rate debt. High-interest credit card debt, however, should typically take priority over additional retirement contributions beyond the match.

What if my debt feels too large to tackle on my own?

That's a very common feeling, and it doesn't mean your situation is hopeless. A financial planner or a reputable credit counseling agency can help you see the full picture clearly and build a plan that accounts for your whole financial life, not just the debt itself.

The Bottom Line

Debt has a way of feeling like a permanent condition when you're in the middle of it, but it isn't. With a clear list of what you owe, an honest budget, and a payoff method that fits how you're motivated, you can make real, visible progress. The path might take time, but it does have an end.

At Life Story Financial, I work with women who are ready to get honest about their finances and build a plan that actually fits their life, whether that means paying down debt, building an emergency fund, or getting ready for the next chapter. If you'd like a second set of eyes on your debt payoff plan, I'd be glad to talk it through with you.

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