Apr 9, 2025
The pandemic was tough for everyone. Many people ended up having to borrow money when the economy was shut down.
If you built up $10,000 in debt on your credit cards to survive the pandemic, you need to explore your options for getting back on track.
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Here's how you can be proactive in dealing with your card balance so you can move on as quickly as possible.
How to tackle credit card debt
Credit card debt can be hard to pay down because the interest rates are so high — an average 21.47% as of November 2024 — and minimum required payments so low.
It may be tempting to pay the bare minimum, but because minimum payments only cover interest and a little principal, it could take decades to become debt-free. Meanwhile, interest is compounding on your balance the whole time.
Don’t let that happen. Instead, try to reduce your interest rate by consolidating your debt into a personal loan or using a balance transfer credit card to pay off what you owe.
Balance transfer cards can offer a 0% introductory rate if you qualify for a special promotion, but you'll usually have to pay a fee of around 3% to 4% to transfer your balance.
Still, this may be worth it if you can pay off the balance before the promotional rate ends.
If you can't consolidate your debt so you have just one monthly loan payment, you have the option of continuing to pay what you owe -- with some tweaks.
Dave Ramsey recommends paying off the debt with the lowest balance until that's done, then moving on to the debt with the next lowest balance.
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This is called the debt snowball method and Ramsey believes that you're more likely to stick with your plan when you score quick wins by paying off debt with small balances right away.
Alternatively, send extra payments to the debt with the highest interest rate first before moving on to the next costliest debt until you're done. This is called the debt avalanche method.
If you simply don’t have the cash flow to pay down your debt, you can try to negotiate a debt settlement with your creditors.
This would mean the creditor would have to agree to let you pay off the debt over time on more favorable terms or let you make a lump-sum payment for less than the total debt and forgive the rest.
Card companies are hesitant to agree to such terms unless they are convinced you can’t pay. Moreover, both options can damage your credit. That’s why debt settlement is a last resort.
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How to build long-term financial security once you become debt-free
Once you've paid off your credit card, you want to stay out of debt in the future.
Start by building an emergency fund in a high-yield savings account that can cover three to six months of living expenses. That way, you won’t drown financially when future pandemics or other emergencies occur.
You may want to work with a financial adviser to create a budget for retirement and other goals as well so you can build the long-term stability you deserve.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
