How do I get out of debt?

Getting out of debt requires three steps: stop adding new debt, choose an accelerated payoff strategy (avalanche or snowball), and free up cash by cutting expenses or increasing income — applied consistently until every balance reaches zero.

Debt payoff is a math problem with a behavioral wrapper. The math is simple — pay more than the minimum, direct extra dollars to the right account, repeat. The behavioral piece is harder: you have to change the habits that created the debt in the first place. Here is the proven sequence.

Step 1: List every debt

Pull your free credit reports at AnnualCreditReport.gov to confirm every account on file. You're entitled to a free report from each of the three bureaus (Equifax, Experian, TransUnion) weekly through the end of 2026.
For each debt, record: creditor name, current balance, interest rate (APR), and minimum payment.
Note whether each debt is in good standing, delinquent, in collections, or charged off — that determines your options.

Step 2: Stop adding new debt

Before attacking balances, stop the bleeding. Put credit cards in a drawer, pause subscriptions billed to credit, and build a small cash buffer (even $500–$1,000) so that unexpected expenses don't force you back to revolving credit. The CFPB's budgeting tools can help you find that buffer in your current spending.

Step 3: Choose a payoff method

Debt avalanche: Pay minimums on everything; throw every extra dollar at the highest-APR debt first. This minimizes total interest paid — the mathematically optimal method.
Debt snowball: Pay minimums on everything; throw every extra dollar at the smallest balance first. Eliminates accounts faster, which many people find motivating even if it costs slightly more in interest.
Either method works. The CFPB compares both approaches and notes the best one is whichever you will stick to.

Step 4: Find extra cash

Cut recurring expenses: subscriptions, dining out, unused memberships.
Sell unused items — furniture, electronics, clothing.
Explore additional income: overtime, freelance work, a part-time job.
Apply tax refunds, bonuses, and windfalls directly to the target debt instead of spending them.

Step 5: Consider consolidation if rates qualify

If your credit score qualifies you for a lower rate, consolidating high-APR credit card debt into a personal loan or balance-transfer card can reduce the interest you pay and simplify repayment to a single monthly payment. See How to Consolidate Debt for the mechanics. Consolidation only helps if you stop using the cards you just paid off.

Avoid these common traps

Debt settlement companies charge fees (typically 15–25% of enrolled debt), can destroy your credit, and leave you owing taxes on forgiven amounts. Payday loans advertised as 'debt relief' charge triple-digit APRs and make debt worse. The FTC warns that legitimate nonprofit credit counselors are free or low-cost — for-profit 'debt relief' companies are usually not worth the cost.

What regulators say

The CFPB recommends listing all debts and comparing payoff strategies (avalanche vs. snowball) based on your motivation style and total interest cost. — CFPB
The FTC warns consumers to be skeptical of for-profit debt relief companies and to consider nonprofit credit counselors as a lower-cost alternative. — FTC Consumer Advice
Consumers are entitled to a free weekly credit report from each of the three major bureaus through AnnualCreditReport.gov. — CFPB

Key takeaways

List every debt with balance, APR, and minimum payment before doing anything else.
Stop adding new balances — even a small cash buffer prevents the cycle from restarting.
Avalanche (highest APR first) saves the most interest; snowball (smallest balance first) builds momentum.
Apply every windfall — tax refund, bonus, overtime — directly to the target debt.
Consolidation helps only if you qualify for a lower rate and stop using the accounts you paid off.

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