The Llama’s 7 Steps to Getting Out of Credit Card Debt

Jake Hartman
By Jake Hartman | April 28th, 2021 06:07pm
Jake started to help connect people with experts in financial services. He contributes to the blog at

We here at The Llama know how easy it is to rack up credit card debt. A swipe here, a purchase there, but at the end of the month you’re hit with a nasty bill. The average U.S. household has over $15,000 in credit card debt. Figuring out a reasonable way to shed your debt may seem like an impossible task, but with our 7 steps we make getting out of debt No Probllama!! (pun intended). We recommend you familiarize yourself with Llama’s 7 steps to getting out of credit card debt before you fall too behind in payments.  



Make two payments a month


It might seem strange, but we recommend making biweekly payments. Biweekly payments won’t increase the amount you are applying to your debt each month; however, it will give you one extra payment a year. Simply put, a credit card payment is required once a month for 12 full payments. If you pay 26 half-payments, that’s 13 total payments a year. You’ll also lower the average daily balance — so you’ll pay less interest!


What the heck is a Debt Snowball?


Need a quick victory? You’ll want to try the debt snowball method. This method works by ordering your debts from lowest balance to highest, regardless of the interest on the cards. Once you have this order, you’ll prioritize your loans by focusing on paying off the smallest one first. You’ll still need to make the minimum payments on your other cards, but all your extra income goes to the credit card with the smallest balance, and keeps more of your green-green cash in your bank account where it belongs!


Paying off the smallest balance gives you a faster sense of accomplishment than if you take the avalanche approach. The only downside is you’ll end up paying more interest over the long term.


Look out!! It’s a Debt Avalanche!!!


Similar to the debt snowball approach, the debt avalanche swaps priorities. Instead of paying off the credit card with the lowest balance first, you’ll pay off the balance with the highest interest. We think this way tends to be cheaper and faster than the snowball approach. Once the highest credit card interest balance is paid off, you’ll work your way to the next high one and so forth until it’s all paid off. 


Debt Consolidation


If you’re feeling overwhelmed by all your debt, you may want to consider consolidating all your loans into one account. Consolidating loans allow you to make one payment each month rather than multiple. One way to do this is by a 0% balance transfer credit card. You’ll need good credit to do this.


Make sure to find a card that offers a 0% introductory period around the 15 to 18-month mark and BOOM! You’re all set—no more high interest on multiple accounts. 


Another consolidation option is a personal loan. Although you’ll have to pay interest on this loan, personal loans are often lower than credit cards, which can still help you save. Heck, the name of the game is to save at all costs. 


Debt Management Plan


A credit counseling agency sets up this type of plan for you. The agency negotiates a lower interest rate and payment with the credit card companies and consolidates your debt to an amount you can afford. Say goodbye to all your late fees and over-the-limit fees. Those are history. The only thing you need to pay your counseling agency a fixed rate each month, which disburses the payment to all your creditors. Most of these plans last from three to five years, at which point your existing debt will be paid off. Sounds nice, huh?


Credit Card Debt Relief


Joining a credit card relief program allows you to pay back your debt in multiple payments that are less than the amount owed. First, you’ll need to stop all payments and save money separately until a substantial sum is saved. Then you will contact the creditors to negotiate paying back their debt with lower fees or lower interest than the amount owed. You’ll a substantially high debt in order to qualify because creditors are unlikely to settle if the debts are too small and easy to pay off.


A certified Debt Consultant will review your financial debt and decide if the program is the right fit. If it is, then the consultant will create a customized and affordable payment schedule for the consumer. This schedule will be used to pay money into an account the consumer will control.

After there is a large amount of money in the account, the consultant will begin negotiations with the lenders. Once a settlement is made, and you approve it, the funds will then be processed to the creditors as payment. The process will continue until all debts are settled. Easy, peasy. 





Finally, there is Bankruptcy, which is your last result effort. We only recommend this option if you’re under complete financial distress. Filing for Chapter 7 bankruptcy wipes out unsecured debt such as your credit cards, but not without consequence. Bankruptcy can stay on your credit report for 7 to 10 years.