Well this article is designed to answer those very two questions.  Although there is a number of ways you can approach this task we have found 3 ways that have been proven to be the most effective.  We cover all three in this article.

#1) Know Where You Stand Financially.

It is important to understand that in order to effectively tackle your credit card debt, it is pivotal you know your current status financially.  This is comprised of having a complete account of all your credit card debt.

 This includes a list of 5 items for each creditor you have:

• The name of each account
• The balance of each account
• The interest rate of each account
• The due dates of each account
• The minimum monthly payments

You will then need to have a thorough picture of your budget and spending patterns.  If you never done this before the best way to compile that information is with an excel spread sheet listing each monthly expense. 

Only then you will be able to see how much money you can afford to throw at your debt.  You will also be able to see if there are ways to reduce spending or increase income to pay more to the multiple credit cards you have. 

I must stress that avoiding this step has shown to be disastrous.  Many people believe they can avoid this vital step and just start throwing money at the problem.  However without a firm grasp of your financial situation you really are doing yourself a disservice costing you more in the long run.

As an extra additive you should also pull your credit report.  Not only is it free but you can also find any potential errors that could be costing you a higher score.  Credit is the new money and every point increase puts you in a better financial position.  The official place to pull your credit report is annual credit report.com.  

With step one accomplished this will give you a firm footing to utilize step two.

2) Implement the Debt Snowball Method And Or The Debt Avalanche Method.

The debt snowball and the debt avalanche method are two of the most recognized processes for paying off multiple credit cards.  Both provide a distinct advantage and are by far two of the best strategies in paying off multiple credit cards.

I wrote extensively about the debt snowball method in a previous article entitled: “ 4 Reasons The Snowball Method Is The Best Strategy In Paying Off Small and Medium Size Credit Card Debts.” I would encourage you to read that article if you haven’t already. 

One of the best features of the debt snowball method is it allows you to receive a confidence booster rather quickly.  By going this route you essentially pay as much money as your budget allows towards the credit card with the lowest balance.  For your other credit cards you maintain the minimum payment. 

Once the smallest balance is paid off, you focus your effort on the next smallest credit card on the list and repeat the process.  You continue with the next one and essentially follow this plan until all your credit card obligations are paid off. 

Now this approach works well when you have small or medium size credit card debts.  The slight drawback is over time you pay more interest with this approach. But, the motivation of seeing your debts paid off can physiologically worth the extra interest paid.

To save the most money on interest The Debt Avalanche method serves as the go to method. 

It works very well when you have large balances spread amongst multiple cards.  With this approach you funnel as much money as your budget will allow toward the credit card with the highest interest rate. 

You will still maintain the minimum payment on the other accounts.  Once that credit card is paid off, you shift your cash flow to the account with the next highest interest rate on your list.  You will rinse and repeat the process until all of the credit card debts have paid off and you are debt free.

Each of the two approaches will work if you are disciplined with your money habits.  But what if you are not or the debt obligations seem too much to handle?  Excellent question this leads us to the third method and may be one of the easiest of the 3 outlined.

3) Use A Debt Management Payment Plan From An Accredited Non Profit Agency.

A debt management plan is the best plan if the debts are too much to handle on your own efforts.  The nonprofit agency will already have a relationship with many of the credit card companies you are seeking to payoff.  

The debt management payment plan will consist of a consolidation of all your debt obligations into one payment. Each creditor interest rate will be drastically reduced making the payment you pay through the debt management plan affordable.

You will not qualify for a loan or enter into a contract for the creditors to take less than what is owed.  If this is what the company you choose is offering do not utilize their plan.

The debt management payment plan I am referring to here is a full payment plan to each creditor based on a lower interest rate already agreed to with the nonprofit agency.

In case you were wondering how the nonprofit company is compensated, they are awarded with grants or other monetary methods amounting to millions each year from the credit card companies.

So what’s the draw back?  The drawback is initially your credit score will take a sizable hit.  This is because you will be closing out all of the credit cards enlisted on the plan.  You will not have access to these accounts any more for use. 

But there is good news. When I was operating as a credit counselor there was room for one or possibly two cards to be left off the plan for emergency purposes.  Before my departure the rules became more lapsed allowing more than one or two cards to be left off the debt management plan.

So if you find yourself drowning in multiple credit card debts using a debt management payment plan is the way to go.

If you are looking for a nonprofit company to start a debt management payment plan you could consider Money Management International. Consideration does not mean endorsement. I worked for them for 5 years, and although there tactics have become aggressive in getting people on the debt management payment plan they are the largest nonprofit accredited agency.

Let’s face it debt is a part of our modern day lives.  In most cases you are able to handle it paying your credit cards and then reusing them again.  However in the age of the Pandemic small and medium size debts can become overwhelming especially if you experience a temporary layoff.

So what is the best strategy to pay off small and medium size credit card debts?

Without contest the best strategy is the “Debt-Snowball” method.  This process gained notoriety by personal financial commentator Dave Ramsey.

So how does it work?  The strategy focuses on paying off debt in order of smallest to largest disregarding what the interest rate that is owed on the credit cards.

For example lets say you have a MasterCard with a $600 balance, a Old Navy Card with a $330 balance, a Visa with a $175.00 balance and a Lowes card with a $1,000 balance.  You would just pay the minimum payment on the other cards until the Visa’s paid in full.

Then once you pay off your smallest bill in this case the Visa, you will then move on to the card with the next biggest balance.  From our example this is the Old Navy Card. The idea is just as a snowball rolled down a hill gains momentum, so to your debt obligations as you pay them off.

So what makes the Snowball method the best strategy to pay of small and medium size credit card debts?

1. It provides motivation

When you are feeling overwhelmed with debt any slight improvement provides motivation. With all the negative press these days we can all use a boost.  Paying off a bill — even a tiny one will provide that incentive to keep going.  The debt snowball approach very base provides that as you tackle the smallest bill.

Motivation is the secret ingredient.  When you pay off that smallest debt first you get a taste of victory.  That feeling of success will drive you tackle the next smallest debt.  Nothing works without motivation and the debt snowball method provides it in spades.

2. It provides psychological boost. 

There is a universal truth that winning boosts morale.  When you payoff the smallest bill it does wonders for the psyche.  With one you know you can pay off 2 and then 3.  The tiniest win psychologically compels you to keep pushing on to the ultimate goal of debt reduction.

3. It delivers quicker results.

Paying off a small debt is easier and will take less time than if you target a bigger debt. It is also works faster than attempting to pay a credit card debt with the highest interest first.

4. It causes behavior change.

Paying off any debt, even a small one, will get you out of the rut of impossibility.  When you feel you are in a heap of debt, negative thoughts of “why try” seep in.  You may feel there is no way forward.  But when you start, tackle, and pay off that first debt hope is restored. Hope combined with results causes behavior change.  You feel the rewards of debt reduction.  Debt reduction is motivating.   The more you feel motivated the more compelled you will be to pay off the money you owe.

But there is one more caveat. Once you become debt free, you are less likely to compile on new debts.  You know how painful that road is and you will do your best to avoid it.

For  these 4 reasons alone the snowball method is the best strategy to pay off small and medium size credit card debts.