The 4 Biggest Mistakes You Can Make When Paying Off Credit Card Debt

It's easy to get into credit card debt. Case in point, Americans owe $1.14 trillion on their credit cards, according to the Federal Reserve Bank of New York. Unfortunately, it's not nearly as easy to get out of credit card debt. Some people spend years or even decades paying it off.

That's not ideal. The longer you're in debt, the more it costs you in interest. So it's important to avoid any mistakes that keep you in debt longer, and there are several common ones that people make.

1. Not bringing down the interest rate

Most credit cards charge hefty interest rates. The average rate on cards that are assessed interest is over 23%, according to Federal Reserve data. To put that in perspective, if you pay that rate on $10,000 in debt, it would cost you over $2,300 per year.

Just because your card has a high interest rate doesn't mean you're stuck paying that much. There are ways to get a better deal. You might be able to get a lower rate by simply calling your card issuer and asking.

But to save as much as possible, the best option is a balance transfer credit card. This type of card has a 0% intro APR on balance transfers. If you get one, you can transfer over your credit card debt and pay it down without any interest charges for the introductory period.

You can avoid interest charges for a long time this way -- some cards have a 0% intro APR for as long as 21 months! Click here to learn more and see our picks for the best 0% intro APR credit cards.

2. Making minimum payments

The minimum payments on a credit card are a tiny fraction of the total balance. With some card issuers, the minimum payment amount is just 1% of the balance plus interest charges.

Because minimum payments are so small, if that's all you pay, you'll barely make a dent in your debt. Let's say you have $5,000 in debt at a 20% APR. If you make minimum payments, it will take you over 23 years to pay off your balance. During that time, you'll pay $7,723 in interest.

Make sure you're paying more than the minimum. Adding $100 or $200 to your payment amount could cut years off how long it takes to become debt free.

3. Telling yourself you'll "pay what you can"

People often take this approach when paying off debt, and it rarely works out well. They'll see what's left over at the end of the month, and then use that to pay down their debt. Except what usually happens is that there isn't much, if any, money left over.

Instead of doing this, commit to an amount you can afford to pay on your credit cards every month. Go over your income and expenses to see what works for you. Then make that payment as soon as you get paid. Don't give yourself time to spend that money on nonessentials.

Keep in mind that you can pay more if you have the money. If you committed to paying $500 per month, but you have an extra $200, you can certainly add that. Contributing more to your debt payoff is never a bad idea.

4. Continuing to use your credit cards

With a large monthly payment, getting out of credit card debt could go much faster than you'd think. If you pay $500 per month toward a $10,000 balance with a 23% APR, you'd be out of debt in just over two years. If you use a balance transfer to get that down to a 0% APR, you could have it done in 20 months.

A balance transfer card can be an excellent tool to help you get free of credit card debt. Click here to see a list of our favorite credit cards with balance transfer offers.

But you'll spend a lot more time in debt if you keep using your credit cards. Every purchase you make is more to pay back. You'll also need to pay interest on it.

When you have credit card debt, stop using your credit cards. Stick to your debit card and cash. You'll only be able to spend what you can afford, and you won't be taking on more debt that adds to your interest charges.

Having credit card debt is a tough situation. But you can get rid of it if you follow a good plan, and there are lots of financial benefits to doing so. You'll save money on interest. Paying down debt can also improve your credit score, which helps you qualify for the top credit cards. Put as much as possible toward your credit cards every month and consider using a balance transfer or 0% APR card, and you'll make fast progress toward being debt free.