She Made Minimum Credit Card Payments for 2 Years and Her Balance Never Dropped. Here’s What She Learned

Credit card expert and CNET Money Expert Review Board member Gerri Detweiler got her first credit card after graduating from college. But after she’d used it to buy a few home appliances, the $1,000 Sears credit card quickly landed her in debt.

She didn’t understand how credit cards and interest worked, and that left her in a tough spot. Then, she spent years working to pay her balance off.

​”I didn’t have a lot to show for it. But I did learn a lot,” said Detweiler.

Here are four lessons she learned along the way.

Schedule automatic payments to avoid late fees

It may sound obvious, but always make sure you set up autopay for your credit card -- even if it’s just for the minimum payment. This will keep your account current, and you won’t face a late payment fee. And it can protect your credit score from getting dinged for not paying on time.

“I was on vacation, and I remembered that I had to pay a credit card bill,” she said. She rushed to pay online but later learned that the transaction didn’t go through. She came home to a late fee and accrued interest -- charges that would have been avoidable with autopay. Even though she was able to call the card company and have the fee waived, she still had to pay the interest. 

“Life can get hectic,” she said. “Set up minimum payments with autopay so you won’t miss that payment.” 

Pay your balance in full, if you can

While paying the minimum will keep your account current, you’ll need to do more to tackle your credit card debt. 

Detweiler didn’t know much about credit card interest rates before her Sears card. So, when it came time to make her first payment, she paid the minimum amount due. Thinking she was doing the right thing, she made minimum payments on time for two years. But after all of that effort, she realized her balance had barely budged. That’s when she knew she needed a different strategy. 

“The biggest takeaway for me was that minimum payments won’t help you pay down the balance anytime soon,” said Detweiler.

When possible, pay off your card in full each month to avoid paying more in interest and accruing credit card debt. If you can’t, try to pay as much toward the balance as you can to cut down on how much you’ll pay in interest, she said. 

Read more: Maxed Out: Inside America’s Credit Card Debt Crisis -- and What We Do Next

Create a debt payoff plan and stick to it

Tackling debt while juggling other bills and savings priorities isn’t always easy. But making a plan can help get you started.

One method Detweiler recommends is to look at the bottom of your credit card statements. Some issuers show the monthly payment amount you can pay to eliminate your balance in full in three years. If the amount you see is within your budget, use this number to create a debt payoff plan to tackle your balance. 

“You know you’ll have an end date,” said Detweiler. And if you can pay off balances sooner with extra money, aim to pay off the debt with the highest interest rate first. “If not, you’ve at least got a plan that will help you eliminate that debt in three years.” 

If the monthly payment you need to make to pay down your balance in three years is a bit of a financial stretch, consider cutting some leisure monthly expenses temporarily to put more toward the balance. You may be able to cancel streaming services, monthly subscriptions or other memberships you no longer use. As for Detweiler, she turned to a side hustle –freelance writing -- and used the extra money from a salary increase at work to put more toward her debt. 

But if you don’t have the means to stick to a debt payoff plan, you can reach out to an accredited credit counselor, Detweiler said. They may be able to eliminate or lower some of your debts and can help put you on a plan toward financial success.

Don’t apply for credit just because you qualify

Even though many credit cards come with rewards and the chance to build your credit, getting a new card isn’t always the smart move. 

“Just because they offer you credit doesn’t mean that’s the best option,” said Detweiler. “Had I shopped around, for example, I might have gotten a better deal,” she said. Instead, she was enticed by the store’s offer and didn’t compare her other options.

Store cards especially can seem compelling since they often come with additional discounts or sign-up bonuses -- but they often come with some of the highest APRs in the industry. While that extra 20% off on an item you want may seem tempting, it’s not worth it if you’ll pay hundreds in interest over time. 

“A credit card is great for building credit, but only if you pay it on time,” said Detweiler. If you can’t, she recommends sticking with a debit card so you only spend what’s in your bank account. 

Other credit card debt resources

These tips can help most people knock out outstanding credit card balances. But if you’re buried in debt, you might need additional guidance. You can find free credit counseling services to help you learn more about your debt repayment options. Some trustworthy options include the National Foundation for Credit Counseling and the Financial Counseling Association of America. The Justice Department website also has a list of approved credit counseling services in every state.