Borrowing

More Americans feel sure they can pay off debt — with a plan, you can be confident, too

Twenty/20

Americans are going into 2020 feeling better than they have in years about paying off their debt.

Just 7% of people expect that they will die with outstanding debt, according to a recent survey from CreditCards.com that polled 2,602 adults. That's the lowest number since the site first conducted the survey in 2013 and a substantial drop from last year, when a quarter of respondents anticipated never paying off their debts.

Ted Rossman, an industry analyst at CreditCards.com, credits favorable economic conditions for consumers' renewed confidence, including one of the best years ever for the stock market and record-low unemployment. "In general, people are feeling really good because of these factors," he says.

Just over half of respondents (52%) are confident that they'll make a significant dent in their credit card debt during 2020. That's about on par with the number of people who feel that way about their mortgages (51%), and substantially more than people with student loans (23%) or medical debt (30%). People with car loans (64%) and personal loans (60%) feel the best about their prospects for the year ahead.

Making a plan can boost your debt-repayment confidence

Before you do anything, it's important to know exactly what your outstanding debts are. Make a list of them, including key details like the interest rate, balances, lender, and any important details like the expiration date of a promo rate.

Mapping out your repayment needs will keep you organized and help you take charge of your debt.

Once you've done that, you can decide what broad strategy to adopt. The "avalanche" method, which prioritizes larger, higher-interest debts, is great for keeping your outstanding balance under control, while the "snowball" method, which prioritizes checking smaller debts off your to-do list first, can give you a greater degree of confidence when it comes time to pay off the bigger debts.

The "blizzard" method, which means alternating between "avalanche" and "snowball," can also be really efficient. It's also important to know how much or how little you can realistically spend on any individual payments.

Within that, think about any debt-specific strategies that could help, like reevaluating your student loan repayment options, refinancing your mortgage, or even filing taxes separately from your spouse.

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Consolidating some of your credit card balances can also make debt repayment easier: You may be able to get a lower interest rate, and you'll have fewer monthly payments to manage.

Personal loans and credit card balance transfer offers — where you can move your outstanding credit card balance to a new card with a temporarily lower interest rate — can both be good ways to do this, too. Remember that it's always smart to compare costs and terms.

Look to a debt-free, more secure future

While you're paying down debt, keep your big financial picture in mind, and figure out how to avoid owing money in the future if possible. "Understand how it happened," credit expert Beverly Harzog told Grow last year. "Otherwise you might end up in debt again."

Doing something as simple as tracking your finances in a paper planner can help you visualize and better plan your daily expenses, experts say.

Have a plan for any raises or windfalls that come your way, too, so you don't fall prey to lifestyle creep.

And balance debt repayment with saving and investing, Rossman says. Doing both at once means you can deal with unexpected expenses without taking on additional unexpected debt, while setting yourself up for a financially secure future.

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