How to Pay Off Credit Card Debt | theSkimm

New site: Credit Card Debt Content Pack

CC debt pack brand image

Pay Off Credit Card Debt

Americans owe more than $1 trillion in credit card debt. Paying it off is like getting a deep-tissue massage: probably a little painful in the moment, but feels much better later. We’ve got all the info you need to get rid of yours. So you can finally relaaax.

Learn the Language

Swipe right for alllll the credit lingo you need to know.


APR FSL

APR

Stands for annual percentage rate. It’s what you’re charged for borrowing money. Like for a credit card or mortgage. Play it like golf: aim low.

See all terms
FSL Balance Transfer

Balance Transfer

When you shift your debt from one card to another, usually to get a lower interest rate. Maybe even no interest rate. But there are some rules, so read the fine print.

See al terms
bankruptcy flashcard

Bankruptcy

When you go to court to legally divorce your debt. It’s not always a clean break: the details can stay on your credit report for up to 10 years. And you could have to sell your home or car to pay back your lenders.

See all terms
FSL Cash Advance

Cash Advance

When your debit and credit cards pull a Freaky Friday, and you use your credit card to pull cash out of an ATM. But this withdrawal has to be paid back...and then some. With interest and fees.

See all terms
FSL Charge-off

Charge-off

The one where your lender starts to develop trust issues, gives up on chasing you down for payments, and reports your debt as a loss. This does not look good on your credit report.

See all terms
FSL Charge Card

Charge Card

Not a regular card, but a cool card. The kind without a spending limit or interest rate. Because you have to pay your balance in full…every single month. Good for people who like rewards and have a great credit score.

See all terms
collections flashcard

Collections

A place you don’t want to go. After not making a debt payment for a certain amount of time, your lender may ask another agency to step in and make you pay. Go-to tactics include calling a lot and mailing ‘pay now’ letters.

See all terms
FSL Compound Interest

Compound Interest

Interest that’s added to money that’s already gained interest. It keeps your balance growing and growing. Your best friend when you’re saving and investing and your worst enemy when you’re racking up debt.

See all terms
FSL Credit Bureau

Credit Bureau

A company that stalks your credit history, translates it into your credit score and credit report, then sells it to banks and lenders. The three big ones: Experian, TransUnion, and Equifax. 

See all terms
FSL Credit Freeze

Credit Freeze

When you put your credit on ice to block new lenders from seeing your credit report. Making it harder for identity thieves to open an account in your name. Cold, but safe.

See all terms
FSL Credit Limit

Credit Limit

How much you can spend before you max out your credit card or loan. Based on things like your income, how much debt you already have, and your track record with credit.

See all terms
FSL Credit Report

Credit Report

Basically your resume for landing a loan. It includes info like how much debt you have, if you’ve ever filed for bankruptcy, and whether you pay your bills on time.

See all terms
FSL Credit Score

Credit Score

An important number that helps banks and credit unions decide whether you’re good lending material. And how much interest they’ll charge you. The higher, the better.

See all terms
FSL Credit Utilization Ratio

Credit Utilization Ratio

The sum of your balances compared to the sum of your credit limits. Psst...lenders like it when you go low.

See all terms
flashcard for credit delinquency

Delinquency

The penalty box for borrowers who are late on a debt payment. Lenders may punish you with extra fees. And the evidence can stay on the record for years.

See all terms
fair credit reporting act flashcard

Fair Credit Reporting Act

A federal law that gives credit bureaus some important ground rules: to keep your personal info private and tell the truth about your credit history.

See all terms
FSL FICO

FICO

The popular kid of credit scores. Aka what lenders look at to determine whether you’re likely to ghost them on payments. Ranges from 300 to 850. Anything above 750 is star status.

See all terms
Fraud Alert flashcard

Fraud Alert

A red flag you can wave when you think something shady (*cough* identity theft) may be going on. It tells lenders looking at your credit report to go the extra mile to verify you are who you say you are before approving new credit.

See all terms
hard inquiry flashcard

Hard Inquiry

Also known as a “hard pull.” This happens when you apply for a loan or a new line of credit. Try not to overdo it. Too many hard pulls can hurt your credit score.

See all terms
lender flashcard

Lender

A person, bank, credit union or other financial institution you borrow money from...with strings attached. In the form of interest and fees.

See all terms
FSL Minimum Payment

Minimum Payment

The least you can get away with paying on your credit card or loan each month without getting a late fee.

See all terms
FSL Penalty APR

Penalty APR

A higher interest rate your lender can charge you for doing something bad. Like paying late or spending over your credit limit. Nice lenders usually let you get back to your regularly scheduled rate after you pay on time for six months.

See all terms
FSL Prepaid Credit Card

Prepaid Credit Card

A card you preload with money. So you’re not actually borrowing, but spending money you already have. Like a gift card you can use (almost) anywhere.

See all terms
Revolving Credit flashcard

Revolving Credit

Any accounts you can keep borrowing from – then repaying – over and over. Like credit cards and home equity lines of credit. Hi, debt merry-go-round.

See all terms
FSL Rewards Card

Rewards Card

A fan-fav credit card that gives you a little something extra (like cash back or airline miles) when you use it.

See all terms
FSL Secured Credit Card

Secured Credit Card

Looks like a regular credit card and acts like a regular credit card. But requires a cash security deposit unlike a regular credit card. Typically for people who’ve had a rocky relationship with credit in the past.

See all terms
FSL Settlement

Settlement

An agreement that you’ll pay a percentage of your debt because you can’t afford to pay it all. Not ideal. But it helps avoid bankruptcy, which hurts your credit score even more.

See all terms
Soft Inquiry flashcard

Soft Inquiry

A credit check that won’t hurt your credit score and isn’t connected to an application for new credit. Think: background checks or credit card pre-approvals.

See all terms
VantageScore flashcard

VantageScore

Basically FICO’s younger brother. It’s another credit scoring model that grades you from 300-850, but isn’t as widely used by lenders.

See all terms

Want more Skimm Money?

Say ‘hi’ to our weekly newsletter. Every Friday, we break down the news and info you need to make smarter money decisions.

I'm in