5 Steps to Managing Credit Card Debt When You're Young

Managing credit card debt isn’t easy. Even people who’ve been “adulting” for years struggle with it. When you’re young, financial independence is still new and that can make debt management very challenging.

At Addition Financial, we work closely with our younger members to give them the guidance and tools they need to manage their credit card debt. With that in mind, here are five steps to managing credit card debt when you’re young.

#1: Track Your Spending

The first thing to do is to be mindful of how and when you spend money and when you use your credit cards.

Are you using credit cards for big purchases that you can’t afford? Or, are you using a credit card to pay for everyday expenses like groceries and utilities?

If you don’t have cash to pay and you’re using a credit card, that’s a red flag that you may be spending more than you can afford. It’s important to get a handle on your spending habits and current money management style before you move on to the next step.

#2: Evaluate Your Credit Card Debt

The next step is to get a handle on your credit card debt. It’s easy to lose track of how much you owe when you’ve got several cards with statements that come in on different dates.

A simple spreadsheet is all it takes. You should list:

  • The name of the credit card
  • The outstanding balance
  • The minimum monthly payment
  • The interest rate
  • Any rewards or incentives for using the card

Once you’ve done that, use our free calculator to determine how long it’ll take you to pay off each outstanding balance. You can find it here.

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#3 Choose a Debt Repayment Strategy

The third step is to choose the debt repayment strategy that’s going to offer you the most peace of mind. There’s no one-size-fits-all solution.

There are several main debt repayment strategies to consider. With all of them, you’ll need to pay the minimum monthly payments for each card. Then you’ll choose one of the following:

  • Start by putting extra money each month toward paying off the card with the lowest balance. Once it’s paid off, you’ll roll the minimum monthly payment plus any extra into increasing your payments on the card with the next highest balance. This strategy is sometimes referred to as the snowball strategy.
  • Or, start by putting extra money each month toward the card with the highest interest rate. This option saves you money in the long run by reducing the interest you pay. Once you’ve paid it off, you’ll move on to the next card – and so on. This strategy is sometimes referred to as the avalanche strategy.
  • Set aside a little extra money to pay more than the minimum monthly payment on every card. For example, for a card with a $25 minimum payment, you might decide to pay $40 each month. You can either rearrange your budget or use “found money” from a change jar to pay the extra. This strategy is sometimes referred to as the snowflake strategy.
  • Roll your existing debt onto a single card with an affordable interest rate. If you can qualify, this strategy can simplify the repayment process.
  • Finally, if a high balance on one card is causing you stress, you may want to adapt the avalanche strategy and use it to pay down the highest balance first. You won’t see results quickly, but if a big number is disrupting your peace of mind, it may be worth trying.

You should choose the strategy that offers you the most peace of mind about your debt. Ultimately, that’s the option that’s going to work best for you.

#4: Curtail Your Credit Card Use

The fourth step is to avoid accumulating more debt as you pay down your existing debt. Most of us are accustomed to reaching for a credit card when it’s time to pay for a purchase. However, doing so without being mindful about it can lead to problems.

We recommend choosing a single card as your “pay in full” monthly option. You can use it for convenience but make sure to pay the entire balance each month. That way, you won’t be accruing new debt.

#5: Create a Working Budget

The final step is to figure out a working budget that will allow you to pay down your debt quickly and still meet your financial obligations.

We put this step last because knowing which strategy you’ll use – and how you’ll curtail your spending – will help you make smart budgeting choices going forward. You can use our free monthly budget calculator to create a budget that’ll work for you and your family.

Managing credit card debt when you’re young isn’t easy. But by following the five easy steps we’ve outlined here, you can get a handle on your debt, create a budget and pay it down as quickly and painlessly as possible.

To learn about consolidating your debt with Addition Financial – and reaping the rewards of membership – please click here now.

The content provided here is not legal, tax, accounting, financial or investment advice. Please consult with legal, tax, accounting, financial or investment professionals based on your specific needs or questions you may have. We do not make any guarantees as to accuracy or completeness of this information, do not support any third-party companies, products, or services described here, and take no liability or legal obligations for your use of this information.


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