5 Best Hacks for Eliminating Credit Card Debt


Acknowledging debt may seem like a small thing, but it’s the first step toward handling it responsibly. So, good job!

Debt sucks—it’s complicated and confusing for almost everyone. For self-employed contractors and freelancers, how you manage your debt is especially important, since your personal credit directly affects your business credit, and therefore your ability to work and earn a living.

So, here it is—Lifesaver’s “cheat mode” for crushing debt.

#1: Stop Piling On the Debt

Back away from your credit cards. That means all of them—the personal and business cards.

One of the fastest and most effective ways to start tackling credit card debt is to stop adding to the amount you already owe. You may find it harder and harder to reach for your wallet when you know that it means dipping into your hard-earned cash.

This may sound obvious, but you’d be surprised by how many people attempt to combat debt while continuing to rack it up. So, resist the urge to swipe while you strategize and implement a plan to help you conquer your debt.  

#2: Confronting Your Debt

If you want to slay the debt dragon, you have to start by knowing exactly how much you owe and to whom. Gather all of your credit card statements, open a spreadsheet, and let’s start crunching numbers. Start by detangling your debt, separating out your personal credit card debt from your business debt. Go card by card, entering the balance for each. List important details like the amount owed and the annual percentage yield on that credit card.

Hopefully, you’re relieved by what you see. But if you’re feeling slightly depressed after knowing exactly how in the red you are, take comfort in knowing that we’re halfway there toward putting together a solution.

#3 Creating a Budget

Understanding your income and expenses allows you to start planning and experimenting with a few differents ways to save and lower your debt. We’ve got a step by step guide here. Once you’ve listed your total monthly income and expenses, subtract your total income from your total fixed expenses. The formula couldn’t be simpler:

(Total monthly income) — (Total fixed monthly expenses) = Money left over for spending (fun) or saving

Unfortunately, debt sometimes does require you to cut back, and that likely means you have to reallocate some your discretionary spending toward paying off your debt. Monthly subscriptions are a good place to start. Individually, their cost seems minimal, but these costs add up at end of each month. Besides, do you really need all three or four paid memberships to those music/movie/TV streaming platforms? Determine a monthly percentage of money that you’re comfortable with putting toward paying off credit card debt. Ensure the amount you choose works even when your income fluctuates. Ideally, you want to pay over the monthly minimum, so you can reduce the interest and the principal you owe.      

#4: Maximize Your Cash Flow

There are several ways to increase the amount of cash you have each month. You can start simple by reducing your spending. Put yourself and your business on a spending diet for a couple of weeks or months. Easy things like brewing your own morning coffee/tea, or preparing lunch at home, help avoid unnecessary expenses—for some, this alone can help save upwards of $200 a month. Spending diets are a test of wills and wallets, so tailor it to your financial specifications.

Try to make more money. OK, have your eye roll, but hear us out. It might be time to monetize your side-hustle. Maybe you‘ve been cooking, singing or making your friends laugh for free. Consider trying to generate revenue from your passion on the side.

You could also consider adjusting your fee or payment structure for gigs. This is easier and more flexible than it sounds. You could start by getting paid faster. Maybe you have a recurring gig or client that’s mostly great, but takes forever to pay you. Automating your invoicing system may help minimize the time it takes to get your hard-earned cash. Requesting partial payments for projects upfront is another way to increase your monthly inflows.

#5: Work Smarter

Working smarter means realizing that your credit card habits need to change for the better and, more importantly, for the long term. If you don’t want to find yourself buried in credit card debt again, you have to start incorporating these tricks into your regular money management routines.

Working smarter also means using the right tools for the job. Are you being eaten alive by monthly checking account fees? Alternatively, maybe your savings is just sitting in an account collecting dust—rather than accruing interest. Lifesaver makes it easier than ever to find the financial institutions and services that fit your wallet and lifestyle, so take advantage.