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How To Pay Off Credit Card Debt When You Have No Money

Credit card debt can be a huge burden, and it’s difficult to overcome if you’re on a low income. These are some strategies you can use to become debt-free.

May 19, 2022

If you’re barely breaking even financially, you’re not alone. Approximately 64% of Americans live paycheck to paycheck, and that figure can be even higher for lower-income Americans. 

And when finances are tight, making progress on your credit card debt can seem impossible. How can you pay off debt when you’re barely able to make ends meet? 

This guide will explore how to pay off credit card debt when you have no money. We’ll discuss strategies including debt consolidation, earning extra income, and exploring credit counseling programs. 

How to pay off credit card debt when you have no money

Credit card debt can be a vicious cycle. Many of us get into debt because we can’t afford our monthly expenses — and from there, it becomes much more difficult to get out of debt. 

Getting out of debt can be a long journey, but it’s not impossible — even for those of us on a low income. Here are some strategies to consider. 

Explore nonprofit financial assistance or credit counseling

It’s wise to utilize any resources that are available to you. For debt relief, looking into nonprofits that offer credit counseling and/or financial advising can be beneficial. 

These services can provide insight on how to become debt-free on a low income. They may help you draft a plan, negotiate with creditors, and more. 

Many of these services offer an initial consultation for free. They may offer certain paid services that do cost money, but often the basic advice is free or very low-cost. 

Explore debt relief options

Debt relief can help alter the structure of your debt or lower your interest rate, which can help you pay it off more effectively. 

Debt consolidation is a common form of debt relief. This involves consolidating multiple debts into a single loan — often a personal loan or a debt consolidation loan. 

It’s worth consolidating your debt if it can help lower your interest rate. If you’ve earned a good credit score, you could potentially consolidate credit cards into a lower-interest line of credit. 

Another alternative is a credit card balance transfer. This involves transferring the balance on one credit card to another one. This strategy makes sense when you can transfer a balance to a card with a lower interest rate. 

Both debt consolidation loans and credit card balance transfers can also help simplify your financial situation. After consolidating or transferring, you’ll only have one monthly bill to pay instead of multiple. 

Finally, you can consider utilizing a debt management plan. These plans are often offered by nonprofit credit counseling organizations. 

With a debt management plan, you’ll enter into an agreement with the nonprofit credit counseling organization. The organization will then work with your creditors to pay off the debts. You’ll make a monthly payment directly to the credit counseling organization. 

These plans can affect your credit and there are fees associated with them. Most credit counseling programs offer free initial consultations, so you can find out more about your options before paying anything. 

Understand responsible credit usage

If you have existing credit card debt, the last thing you want to do is add more debt to your balances. To avoid increasing your debt, it’s important to understand some of the principles of responsible credit usage: 

  • Pay your bill on time each month

  • Always pay more than the minimum payment required

  • Pay the full balance whenever you can

  • Only use your credit card for necessary purchases

You should also take steps to improve your credit score. This can help you save money on interest, qualify for better loans/credit cards, and make most aspects of your financial life easier. 

Improving your credit starts with monitoring your credit report. You can order a free credit report from each of the three major agencies once a year by going to You could also use a free service like Credit Sesame or Credit Karma. 

Start a side hustle

Increasing your income through a part-time job or side hustle can help you pay off debt faster. This is particularly true if you commit to using most or all of this new side income to pay down debt. 

Even if you opt to simply drive for a ridesharing company a few hours a week, that could be a few hundred dollars each month used to pay down debt. Over time, this can add up quickly. 

Start budgeting

Budgeting each month can help you save money, which could free up some funds to pay down debt and prevent the desperation of an “unbury me” mentality. Budgeting can also help you understand where your money is going to identify areas that you could cut back on.

You can also work extra debt payments into your budget proactively. For example, you could add a $50/month line item to your budget to make extra payments toward your high-interest debt

Choose the right debt payoff strategy

There are a few specific strategies or philosophies you can use to pay off your debt. The two most common are the avalanche and the snowball method. 

Debt avalanche method 

The debt avalanche method encourages you to prioritize paying off the credit card balances with the highest interest rates first. Mathematically, this is the optimal method, as it can save you the most money. 

Debt snowball method

The debt snowball method encourages you to prioritize paying off the smallest card balances first. This method creates psychological “wins” by providing the momentum of completely paying off smaller loans/balances first. For many people, this can be motivating to keep pushing forward to become debt-free. 

The right method for you depends on your personality and preferences. If you would be motivated by the momentum of eliminating debts entirely, choose the snowball method. If you’re more interested in saving as much money as possible, the avalanche method is likely optimal for you. 

Master your finances

Paying down debt should be a top priority and can help you strengthen your financial situation. 

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