4 Smart Ways to Pay Off Debt in 2023

If you still have debt in 2023, the most important thing for you to do is to start paying it off. With rising interest rates, carrying debt is only going to get more expensive. It’s easy enough to figure out how much debt you have, but it can be hard to come up with a plan to get rid of it that works for you. Here are four smart ways to take control of your debt this year:

Try the debt avalanche method

With continued interest rate hikes, the smartest way to pay off debt in 2023 is by focusing on your highest-interest debts first. If you pay off a debt with a high interest rate, you will save money in the long term. 

The debt avalanche method focuses on paying off your debts with the highest interest rates first and working your way down, with the ultimate goal being to eliminate all of your debts by focusing on one at a time. Once you’ve paid off one debt, celebrate! Then tackle the next one in line and so forth until they’re all gone.

Paying off your debts with the highest interest rates first can help you save money on interest. For example, if you have a credit card that charges 20% interest and another one that charges 10%, it makes sense to pay off the 20% interest rate first to save the most on interest.

This method is best for someone with smaller balances that have room in their budget to allocate additional funds each month towards paying down their debt. 

Apply for a debt consolidation loan or a balance transfer credit card.

Before you rush to apply for a debt consolidation loan or a balance transfer credit card, it’s important to understand the difference between these two types of financial products.

  • Balance transfer: A balance transfer credit card allows you to transfer a balance from one credit card (which has an existing balance) to another and pay less interest each month while doing so. These are typically promotional offers that have an established end date and fees associated with transferring the balance over. Once the offer ends, the interest rate will rise significantly and most likely be similar to or higher than what you were paying before you transferred the balance(s) over. It’s important that you feel confident in paying the balance off before the promotional end date approaches.
  • Debt consolidation loan: A debt consolidation loan is a way to combine multiple debts into one loan—usually at a lower interest rate than what you’re currently paying on those debts. This allows you to lock in a fixed interest rate, steady payment, and save money on interest.

These options are best for those with good credit who will have a higher likelihood of getting approved with favorable rates and terms. 

Look into a debt settlement or debt relief program

Debt settlement or debt relief programs are another way to pay off your debt. A debt settlement program is when a company acting on your behalf contacts your creditors and negotiates a reduction in the balance you owe them in exchange for a lump sum payment or payment plan. It’s important to note that these programs tend to have an initial negative impact on your credit. However, as your debts are settled and paid off, this would reverse over time. This is considered a trade-off for reducing your debt owed and paying it off significantly faster over other repayment methods. 

These types of programs are a good option if you have a large amount of high-interest credit card debt, medical bills, or other types of unsecured loans and struggle to make monthly payments. A debt settlement program may also be an alternative option if you’re considering bankruptcy.

Paying off debt is easier than you think if you have the right plan and mindset.

If you’re trying to pay off your debt, you may feel like a hamster on a wheel. You get closer to the finish line, but it just keeps moving further away. This can be discouraging and cause you to doubt yourself and your ability to succeed.

But if you keep working at it, paying down debt is totally doable. It’s important that you don’t get discouraged by the numbers or let fear dictate your actions when tackling debt—you need to stay focused on what matters most: saving money and getting out of debt as soon as possible.

Here are three tips for staying motivated:

  1. Don’t lose sight of your goal. It’s easy to get distracted by other financial goals, such as saving for retirement or buying a house; but if you don’t pay down your debt, these other goals will be out of reach.
  2. Don’t give up. If you have a setback, don’t get discouraged. Make an adjustment and keep going. 
  3. Don’t look back. Don’t dwell on how you got into debt, or the mistakes you made along the way. Instead, focus on what you can do now to get out of debt.


We hope these tips have helped you get a better understanding of your debts and how to pay them off in 2023. If you have any questions or need help figuring out which payoff strategy is best for you, request a Custom Debt Relief Plan. One of our IAPDA-certified debt specialists will take the time to listen, walk you through your complete financial situation, and what approach will save you the most money. 

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