how to get out of debt

first, the number working against you

Not your balance. Your rate.

Balance is what you owe. Rate is how fast it grows while you're not looking — and it's the part almost nobody can name off the top of their head. As of the second quarter of 2026, the average APR on credit card accounts actually carrying a balance was about 22%, according to Federal Reserve's G.19 report. That's the figure for accounts being charged interest, which is the only figure that matters if you're carrying a balance. It's tracked monthly by the St. Louis Fed, so it moves, but it has been in the low twenties for a while now.

Twenty-two percent is a big number in a context most of us never think about it in. If someone offered you a guaranteed 22% annual return on an investment, you'd assume it was a scam. Paying down a 22% card is that return, in reverse, guaranteed, tax-free. That's the whole reason debt payoff beats almost everything else you could do with a spare $100.

So before anything else: open every account and write down the rate. Not the balance — you probably already know those, roughly, in the anxious way. The rate. Card, store card, phone financing, buy-now-pay-later, car, student loans. Some of those are 0%. Some are 28.9%. You cannot make a good decision until you can see which is which.

minimums are the product, not the favor

Here's the part that made me actually angry when I first ran it.

A typical credit card minimum payment is about 1% of your balance plus that month's interest, with a floor of $25 or so. It sounds generous. It's structured so that the payment shrinks as your balance shrinks — which means the finish line keeps backing away from you.

Take a $6,000 balance at 22%:

Twenty years. On six thousand dollars. You'd pay for the thing more than twice.

Now change exactly one variable. Instead of letting the payment shrink, you fix it at $250 a month and don't move it:

snowball vs. avalanche, settled

Two methods. Both real, both endorsed by people who know what they're talking about, and the CFPB lays out both as the two legitimate options.

Avalanche — pay minimums on everything, throw every spare dollar at the highest rate. Mathematically optimal. You pay the least interest possible.

Snowball — pay minimums on everything, throw every spare dollar at the smallest balance. You close accounts faster, which feels like progress, because it is.

The finance-explainer default is to tell you avalanche is correct and snowball is a comfort blanket for people who can't do math. That's not what the research found. In 2012, David Gal and Blakeley McShane published a study in the Journal of Marketing Research using data on about 6,000 people working their way out of debt. The strongest predictor of actually eliminating the debt wasn't the dollar amount paid down — it was the share of accounts closed. Kellogg's write-up puts it plainly: small victories predicted finishing.

Which reframes the question. It's not "which is optimal on a spreadsheet." It's "what does the snowball cost me, and is that worth buying?"

so what does it cost?

Let's price it. Three debts, $450 a month total to work with:

Run both:

Same finish date. The snowball cost $220 more across the whole 22 months — about ten dollars a month — and delivered the first closed account five months sooner.

And there's a third option nobody names: start with the smallest balance for the quick win, then switch to highest-rate for the long middle. You get the momentum and most of the math.

the five moves, in order

Order matters more than intensity. Doing these out of sequence is how people end up exhausted in month three with nothing to show.

1. stop the bleeding

You cannot pay down a balance you're still adding to. Take the card out of your phone's wallet, out of your browser's autofill, out of the drawer. Not forever — for the length of this project. If a subscription is auto-charging that card, move it or cancel it today.

2. write down every rate

All of it, one page. Balance, rate, minimum, due date. The CFPB has a free reducing-debt worksheet if a blank page feels like too much. This step is the one people skip because it's the one that hurts, and it's also the one that makes every later decision obvious.

3. pick one target

One. Minimums on everything else, every spare dollar at the target. Splitting extra money across four debts feels responsible and accomplishes close to nothing — the whole mechanism, under either method, is concentration.

4. automate it on payday

Not at the end of the month, when the money is gone and you're negotiating with yourself. The day it lands. A fixed amount, scheduled, boring.

5. ask for a lower rate

The most underrated ten minutes in personal finance. Call the number on the back of the card, say you're considering a balance transfer and want to know whether they can lower your APR. Sometimes it's no. Sometimes it's several points, which is free money for one phone call. Have your payment history ready if it's clean.

if minimums alone are already drowning you

This guide assumes you have some room, even a little. If you don't — if the minimums are eating a share of your take-home that makes the whole thing impossible — that's not a discipline problem and none of the above is the right tool.

What you want is nonprofit credit counseling, not a debt-settlement company that advertises on late-night TV. A counselor certified through the National Foundation for Credit Counseling can negotiate a debt management plan directly with your creditors, often at a meaningfully lower rate. The initial consultation is typically free.

Two things to know going in. Reputable counseling agencies are nonprofits and will give you an honest read even when the answer is "your situation needs a bankruptcy attorney, not us." And for-profit debt settlement is a different industry with a different business model — it generally involves deliberately missing payments, which damages your credit, and the promised outcome often doesn't materialize.

Asking for help early is the cheap version. There's no version of this where waiting makes the numbers smaller.

the point of all this

Debt is loud. It follows you into good moments and makes them smaller. The specific relief that comes from a payoff date isn't really about the money — it's that an open-ended dread turns into a finite project with an end you can see.

Twenty-six months is a long time. It is also not forever, and "not forever" is the whole thing.