How to Pay Off Your Credit Card On Minimum Wage

Estimated read time: 3 minutes

Making minimum wage is tough, and doesn’t leave a lot of room for extra expenses, but if you’re a minimum wage worker it’s highly likely you’ve purchased something on credit. Now, having access to credit may seem like a boon when it comes to buying. However, when it comes time to pay the piper, the extra expense can be a burden if you don’t make a plan to pay down your credit card. Here’s how to pay your credit card on minimum wage in four steps:

Step 1: Make a Budget

A budget is a way to organize and categorize your income, expenses, and spending. There are a few steps to take when creating a budget. In order to be successful, we have found five helpful steps to take when creating a budget.

Set realistic goals

In this instance, your goal is to pay off your credit card on minimum wage—a hard, but not impossible task.

Identify your income and expenses

Knowing how much money you make, and how much money you spend is the foundation of a budget. A budget will help you monitor your spending, expenses, and income. Once you figure out where your money is going each month you can start to find ways to pay your credit card bills.

Separate needs from wants

This will enable you to stop spending and save more money. Use your savings to pay off your card.

Design your budget

Use spreadsheets, apps and strategies to come up with a budget template. There are scores of options, and a personalized budget will make the process simpler and easier to pay off your credit card debt!

Put your plan into action

Use your newly-built budget to monitor your spending and expenses. This will help you find ways to save and let you pay more on your credit card than you are now. More money saved equals more money to you get out of credit card debt.

Step 2: Find Hidden Cash

Now that you have a way to budget and know how to budget, it's time to get saving! Minimum wage is next to nothing, so we're going to have to get creative to figure out ways to pay off your credit card. Finding yourself strapped for cash at the end of the month and struggling to make monthly payments toward your debt balances can be agonizing. But, once you take a hard look at your spending and you realize that you can cut spending in some areas of your life.

  • Save on groceries: Whether buying in bulk or couponing, there are a number of ways to save on groceries.
  • Save on transportation: Carpool when you can, or ditch your car to use a bike.
  • Cut back: Bring your lunch to work, shop less and go green.

If you make a few lifestyle adjustments you can rework your budget to uncover hidden cash.

Step 3: Make Extra Money

In today’s age of convenience, there are a number of ways to make extra money. Here are some of the more common ones. Drive or deliver groceries for extra cash. Signing up for Uber, Lyft, Shipt or any number of services that allow you to make money on demand could be the cushion you need to pay down credit debt. Sell old stuff. If you’ve had things lying around for more than six months, unused, sell them off and pay that bill! Earn money online. With surveys and other options for earning online, there’s no reason not to try.

Step 4: Transfer a Balance

If you can, take advantage of credit cards that have lower interest rates and intro APR that encourages a balance transfer. Ideally, if you can get a card to transfer a full balance that will be your best bet. However, any amount of balance transfer can help you pay down debt faster.

Final Considerations: Paying Down Debt

Paying down debt is never easy, but if you make minimum wage, the challenge is an even harder feat. Still, with some lifestyle changes you can find extra money and pay down your credit card bill like a responsible consumer. Don’t let your credit card give you the blues, get your debt under control with these tips.