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It’s a problem most people face at some point: You’re carrying balances on multiple credit cards, or loans and it’s difficult to keep track of due dates or pay more than the minimum. You’re racking up interest charges and feel like you’ll never pay off those balances. What can you do? Make a plan to manage your debt — and consider consolidation as a tool to help you do it.

Make Your Plan

A basic plan for paying off debt starts with three simple steps:

1. Write down what you owe.

Include your minimum monthly payments, and the interest rates.

2. Determine how much you can realistically pay toward your debt each month.

Take your income and subtract your financial obligations, including but not limited to household bills, savings, food, as well as the minimum payments for your debt accounts. The amount left will give you an idea of what you can spend on paying down your debt. If you have nothing left, look for ways to cut everyday expenses to come up with a little extra.

3. Determine how best to use the money you have to pay down your debt.

Decide how best to approach paying off your debt. This will depend on the amount of money you have, how much you owe, and how many accounts you need to pay off.

If you want to include long-term debts, larger debts or want to minimize the number of bills you pay, consider debt consolidation. With this approach, you consolidate all your balances into a single account, which simplifies recordkeeping and makes it easier to pay on time. It may also help reduce your monthly payment amount and could save you money on interest charges over the long run. Depending on your situation, there can be several consolidation options.

Find the Right Debt Consolidation Plan

Start at home, by refinancing your mortgage or using your home’s equity.

When you refinance, you pay off your home loan and replace it with one that helps you reach your goals. You can access cash with a cash-out refinance to pay for home renovations, major expenses, or to pay off higher-interest debt. This is a good option when you can get a lower interest rate or decrease monthly mortgage payment, so more money is available for other expenses.

If you have available equity in your home, you may be able to borrow against it to consolidate your debt. A home equity line of credit typically has lower rates than most credit cards, and you can choose principal and interest or interest only payment options.

Use a quick and easy loan to pay off debts over a specific time period and build your budget.

A personal loan may be a good choice for larger debts. It gives you a fixed interest rate, a fixed monthly payment, and a specific time line for paying off your balance.

Pay off debts over time and have financial flexibility.

One option for keeping access to credit as you pay down your debt is using a credit card balance transfer.

When you transfer your balances to a single credit card, you can pay down debt with fewer bills, and still have the flexibility to use the leftover balance on your card for purchases if needed. This can be a particularly good option for moderate debts. Look for a credit card with low rates, special balance transfer offers, and 0% introductory APRs. Set up automatic payments in online and mobile banking to pay your debt off within the 0% APR window, to stay on top of payments and save as much as possible.

Keep Moving Forward

Whichever method you choose, stick to your plan until your debt is gone. Then make sure you don’t let yourself fall into old habits. Consider taking the money you were using to make debt payments and put it into an emergency savings fund. That can be your go-to source of funds when unexpected expenses arise. And stick to a budget that ensures you spend less than you make — so you can keep moving forward in good financial health.

NOTICE: This is not a commitment to lend or extend credit. Conditions and restrictions may apply. Information and offers are subject to change without notice. All loans are subject to credit and collateral approval. Not all loans or products are available in all states.

NMLS# 399797

The creditor and issuer of the Latitude Mastercard credit card is KeyBank N.A., pursuant to a license from Mastercard International Incorporated. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated. Variable rates after introductory period as of 8/1/2019, based on credit worthiness.

“Making a Plan to Get Out of Debt,” LaToya Irby, The Balance.com, posted Sept. 18, 2016, https://www.thebalance.com/debt-habits-to-avoid-960829, accessed Jan. 25, 2017

This material is presented for informational purposes only and should not be construed as individual tax or financial advice. KeyBank does not provide legal advice.

By selecting any external link on key.com, you will leave the KeyBank website and jump to an unaffiliated third-party website that may offer a different privacy policy and level of security. The third-party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend or guarantee any product or service available on that entity's website.

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