How to Get Out of Debt: Practical Strategies for Financial Freedom

It’s no secret—Americans really know how to get into debt. According to the New York Fed, U.S. household debt climbed to $18.59 trillion in the third quarter of 2025. The numbers are even more staggering on a personal level. As of Q3 2025, the average family with credit card debt owes $6,523 (Source: Transunion), whereas the average auto borrower owes about $24,602 (Source: Nerdwallet), student loans average $39,075 (Source: Education Data) for a Bachelor’s degree, and average mortgage debt is around $252,505 (Source: Bankrate).

Understanding How to Get Out of Debt is a Critical Step Toward Long‑Term Financial Stability

While getting out of debt often starts with willpower, there are proven financial strategies to consider. Securityplus Federal Credit Union in Maryland has created this guide to break down proven debt reduction strategies that can help individuals and families regain control of their finances¹.

Make the Commitment to Paying Down Debt

If you’re carrying a lot of debt, be prepared to put about 15% of your income toward reducing it. Making only minimum payments on your credit cards and other loans will cause interest charges to pile up, meaning it will be difficult to break the cycle and get out of debt. Creating a structured debt reduction plan helps turn motivation into measurable progress.

• Find online assistance. Consider investing in debt-elimination software to help you run the numbers and set priorities. Debt‑tracking tools can also help you stay accountable and visualize how extra payments impact your payoff timeline. Securityplus FCU’s free Debt Consolidation Calculator will help you understand how rolling your debt into a single loan can save you money in the long run.²

• Tighten the belt. To free up money for debt payments, you’ll need to reduce spending. Come up with a monthly budget, put it in writing, and stick to it. Use our budget calculator to keep tabs on your income, expenses, and opportunities to save. Cut back where you can by cooking rather than dining out. Cancel cable and opt for a more cost-effective streaming service. Bargain hunt for great deals on discount sites like Groupon and Slickdeals. Small adjustments to your spending habits can add up over time.

• Seek bigger savings. Evaluate your insurance policies to see if you can find less-expensive coverage that still meets your needs. Through third-party relationships or referrals, Securityplus FCU may be able to connect members with licensed insurance providers to explore coverage options that meet their needs. Availability and eligibility vary.

Use Credit Cards Wisely

Credit cards offer convenient buying power and can earn you valuable rewards. Problems arise, however, if you charge too much and carry a balance, causing interest to accumulate. Responsible credit card use is one of the most important factors in maintaining a healthy credit score.

• Set priorities. If you have multiple credit cards, identify the one with the highest interest rate. Pay that card down as aggressively as possible while making minimum payments on the others. After the first card is paid off, allocate your largest payment to the card with the second-highest interest rate, and so on, until you eliminate your debt. Use our credit card payoff calculator to help you see how long it will take to pay off a credit card.

• Look for 0% interest rates. Another technique is to apply for a new credit card that offers a promotional 0% interest rate, usually for a period of 12 to 24 months, then transfer all outstanding balances to the new card. This will buy you time to pay down the balance without accruing additional interest charges. Securityplus FCU offers a number of credit cards³ to help our Maryland members keep their debt under control.

Be Strategic About Your Loans

Buying a home, getting a new car, sending your children to college—these can all be worthwhile investments, and borrowing money is a great way to make them happen. While loans can afford you the opportunity to make major expenditures, keeping up with the payments can be a challenge. Strategic loan management ensures that borrowing works in your favor rather than against your financial goals.

• Make mortgages manageable. Most homes are financed with 15- or 30-year mortgages, but you’re not obligated to keep the original loan that long. If interest rates drop, consider refinancing. Even a 1% rate reduction can trim payments on a $200,000 mortgage by well over $100 per month. If rates haven’t dipped, switching to a loan with a longer payoff period will reduce monthly payments and free up cash to pay off shorter-term debt. We can help you navigate our many mortgage refinancing options.

• Shift gears. Consumers often drive away from an auto dealer with a vehicle they love and a loan they don’t. The solution is to trade in that unsatisfactory loan on your new car, motorcycle, or RV. Refinancing to a lower interest rate or longer repayment period will reduce monthly payments and minimize stress on your household budget. Securityplus FCU provides a range of auto refinancing options to help you get back on track.

• Simplify student loans. Student debt can be crippling. One solution is to consolidate all those years of school loans into a single new loan to reduce overall monthly payments and simplify your finances. College grads with federal loans can apply for a Direct Consolidation Loan.

• Beware of debt-relief companies. Many debt-relief companies can be scams. In November of 2019, a student loan debt-relief scheme siphoned millions out of former students’ pockets, according to the Federal Trade Commission. Contact your state Attorney General’s Office or consumer protection department to vet out debt-relief companies before giving them your business. Working directly with established financial institutions, like Securityplus FCU, helps ensure transparency and consumer protection.

Taking proactive steps toward debt reduction can improve your credit, strengthen cash flow, and open the door to future financial opportunities. Developing a smart strategy to pay down your debt and consolidate loans will help you get a handle on your finances. Securityplus FCU provides a variety of resources to help members understand their options and improve their overall financial health. Contact us today to learn more about how we can help you manage your debt⁴.