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Americans enter 2025 with record amounts of credit card debt — and with an average credit card interest rate of 22.3%! That kind of interest can bury you, destroying all your efforts to get ahead, undermining the hours you put in at work, and painfully demonstrating that the system is destroying your hope.

STOP! There is a way out of the debt dilemma. In fact, there are several ways out. But you can't pin your hopes on luck — the longshot dream of winning the lottery. And it won’t come from the Pied Piper of debt consolidation offers on late-night TV commercials.

Instead, getting out of debt requires a carefully constructed plan, some advice you can trust, and the self-discipline to put that advice and plan to work on a regular basis. In other words, it’s like a diet. Only there is no magic debt-relief pill like Ozempic or Wegovy.

Paying only the monthly minimum payment may keep your credit in good standing, but you’ll quickly notice the payments don’t make a dent in your debt. Even if you stop charging new purchases, the interest on your outstanding balance grows faster than your payments reduce it.

That’s how card issuers — banks and financial services companies — get rich! It’s how they pay celebrity endorsers for commercials and sponsor sporting events. They are making money on the outrageous interest you pay.

The secret is to turn that formula into your favor. Start by making a list of all your credit cards, the current balance, the interest rate and the minimum monthly payment.

Then pick one or two cards — the highest-rate cards — for this strategy. Take this month’s minimum required payment and DOUBLE IT! Write that amount down. That’s the amount you must pay every month — not double the new minimum — but that original doubled amount, every month.

Then, take the card out of your wallet, and off your online payments services. Don’t charge another penny on it!

If you follow this formula, your balance will be paid off in as little as two years — instead of the 30 years it will take paying the regular new minimum every month. And you’ll save a fortune in interest!

How large a fortune will you save? Typically, paying only the minimum means you wind up paying four times the cost of the original purchase in interest along the way!

Wait — I hear you! You just wondered how — if you’re struggling just to pay the minimums — how on earth you can make that double payment every month. Well, this is the tough part. Take a look at how you spend your time, as well as your money.

The quick answer is a second job on weekends or evenings. But what if you have no transportation, or have to watch the kids, or have no regular hours? Be creative. If you’re going to the grocery store, drive your elderly neighbor — who can pay you for this helpful service. If you’re home with the kids, could you watch one or two more, to earn extra money?

It is always easier to find a way to earn a bit of extra money than to cut back on necessities — even if you know cutting out that daily coffee, weekend wine or even an extra cable subscription could find you the monthly extra to make that double payment.

Remember, this isn’t a lifetime commitment to doing double duty. Three years will pass quickly — either leaving you with a larger card balance, or free of debt. It all depends on the choices you make today, at the start of the New Year.

The National Foundation for Credit Counseling (NFCC.org) has member agencies in cities around the country. Or you can call them at 800-388-2227. Either from their website or by phone, you’ll be connected to a nonprofit NFCC-certified credit counselor who can help you work through your problems — either over the phone or in person. Counseling is either free or costs just a nominal fee, and there are no hidden fees.

Three alternatives will arise. One is that they will work with you to set up a budget, discuss alternatives and help you pay your debt with strategies like the one described above.

Or they may put you into a debt management program, after they consult with your creditors. You’ll send the agency one check every month, and they will pay the creditors a smaller amount. But the creditors agree to wipe out the past interest or to lower the rates in exchange for this sure repayment plan. And you won’t receive those annoying collection calls.

As a last resort, the NFCC counselor might suggest bankruptcy. That will depend on your work situation, your income and your assets.

But the key is that you can trust these counselors. Don’t confuse them with the late-night advertisements for “debt consolidation.” Typically, those ads tell you to send them a check — and just stop paying your bills. Then, they say, the money you send will go into a fund that they will use to negotiate with your creditors. And they’ll take their fee out of what they save you.

What they don’t tell you is that simply stopping payments on your debt — without an advance agreement — will trigger all sorts of negative consequences, including potential court orders and judgments that could drain any money in your bank account, post liens against your property, or garnish your paycheck.

So if you’re going to work out a repayment plan, do it through a trusted nonprofit that works with your creditors, instead of leading you down a dangerous path of default.

Again, there is no magic pill to deal with your debt. But there are reasonable ways to get out from under it. But you have to take that very first step. Before asking for help, before deciding on a strategy, before throwing up your hands in despair — make this list.

It doesn’t take a computer program. It doesn’t take math skills. Just one sheet of paper with four columns: lender, balance, interest rate and current minimum payment

That’s all you need to know to get started — whether on your own or with trusted help. And that’s The Savage Truth.

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(Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.)

©2025 Terry Savage. Distributed by Tribune Content Agency, LLC.