<p><img src="https://static2.businessinsider.com/image/6009c5a3c94799001992c98c-2119/Designer%20on%20computer.jpg" border="0" alt="Designer on computer" data-mce-source="Westend61/Getty Images"></p><p></p><bi-shortcode id="disclaimer" class="mceNonEditable" data-type="pointsguy"></bi-shortcode><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><ul class="summary-list"><li>Paying off pandemic debt can feel intimidating, but you can start by assessing your spending.</li><li>Consolidating debt using a <a href="https://www.businessinsider.com/personal-finance/best-balance-transfer-credit-cards" target="_blank" rel="noopener">balance transfer credit card</a> or <a href="https://www.businessinsider.com/personal-finance/how-to-use-personal-loan-to-pay-off-credit-cards" target="_blank" rel="noopener">personal loan</a> can simplify your strategy.</li><li>Coming up with a plan and budget, cutting back where you can, and celebrating success is important.</li><li><a href="https://www.businessinsider.com/personal-finance/best-low-interest-credit-cards" target="_blank" rel="noopener">Read Insider's guide to the best low-interest credit cards.</a></li></ul><p>If you <a href="https://www.businessinsider.com/personal-finance/how-to-get-out-of-debt-coronavirus-pandemic-2020-8" target="_blank" rel="noopener">racked up credit card debt in 2020 because of COVID-19</a>, you're not alone. Many Americans found themselves working fewer hours or out of work completely. Some industries, such as restaurants and gyms, experienced complete shutdowns, leaving hoards of individuals unemployed. And although the <a href="https://www.businessinsider.com/personal-finance/second-stimulus-check" target="_blank" rel="noopener">stimulus checks</a> helped, after <a href="https://www.businessinsider.com/personal-finance/how-much-money-to-save-in-emergency-fund-rules" target="_blank" rel="noopener">emergency savings</a> were used up <a href="https://www.businessinsider.com/personal-finance/steps-managing-credit-card-debt-change-loss-income" target="_blank" rel="noopener">many had to take on debt</a> to make ends meet.</p><p>Now that 2021 is off and running, it's time to <a href="https://www.businessinsider.com/personal-finance/strategies-to-pay-off-credit-card-debt-fast" target="_blank" rel="noopener">make a plan for that debt</a> you accumulated because of the COVID-19 pandemic.</p><aside class="breakout-box headline-regular"><p><strong>Timeline for paying off COVID-19 debt in 2021:</strong></p><ul><li>Determine where your money was spent in 2020 (or the past few months) to determine where else you can cut costs</li><li>Set up a budget using Mint or other software to help you categorize your spending and stick to budget limits</li><li>Figure out where the money to go towards debt is going to come from and budget it in</li><li>Track your progress and celebrate small victories</li><li>Consider a balance transfer credit card or personal loan to consolidate your debt and make it easier to manage</li><li>Call your credit card companies to work out a solution that will work for both of you</li></ul></aside><h2>Autopsy your previous year's spending</h2><p>First, <a href="https://www.businessinsider.com/personal-finance/comparing-my-familys-spending-pre-and-post-coronavirus-lockdown-2020-5" target="_blank" rel="noopener">figure out where your money was spent</a> in 2020. If you haven't already gone through your expenditures from last year, print out your bank and <a href="https://www.businessinsider.com/personal-finance/not-checking-credit-card-statement-cost-hundreds-of-dollars-2020-12" target="_blank" rel="noopener">credit card statements</a> and <a href="https://www.businessinsider.com/personal-finance/losing-income-to-pandemic-ways-to-cut-spending-2020-8" target="_blank" rel="noopener">take a good hard look at your spending</a>.</p><p>If you have your accounts linked up to a <a href="https://www.businessinsider.com/personal-finance/best-budgeting-apps" target="_blank" rel="noopener">budgeting app</a> such as <a href="https://markets.businessinsider.com/news/stocks/mint-app-intuit-review-2019-4-1028112005" target="_blank" rel="noopener">Mint</a>, then you should be able to do a quick inventory of how much you spent on what each month. And if you're overwhelmed by this task, just take a peek at the last few months. You should get a <a href="https://www.businessinsider.com/spreadsheet-to-track-spending-2017-1" target="_blank" rel="noopener">good idea of where your money went</a> by analyzing even three month's worth of expenditures.</p><bi-shortcode id="related-article-module" class="mceNonEditable" data-type="5ed141fa988ee3284623511e" data-title="6 easy steps to save money in 60 minutes" data-url="https://www.businessinsider.com/personal-finance/how-to-budget-money-automate-savings-reach-money-goals-2020-5" data-thumbnail="https://i.insider.com/5ed147533f737012240f4ef3" data-shortcode-display-text="Related Article Module: 6 easy steps to save money in 60 minutes"></bi-shortcode><p>The pandemic probably forced you to evaluate what you wanted versus what you actually needed in 2020. Although you may have thought you <a href="https://www.businessinsider.com/personal-finance/cut-spending-to-live-on-less-2020-7" target="_blank" rel="noopener">cut back on non-essentials</a>, reviewing your spending may point out that you didn't as much as you could have. Were there any <a href="https://www.businessinsider.com/personal-finance/saved-hundreds-cutting-subscriptions-recurring-fees-2021-2" target="_blank" rel="noopener">recurring charges for subscriptions</a> or other products/services that you don't use or need' Cancel or downgrade anything that isn't necessary to free up cash.</p><aside class="quick-tip headline-regular"><p><strong>Quick tip:</strong> If you have a <a href="https://www.businessinsider.com/personal-finance/best-premium-credit-cards" target="_blank" rel="noopener">premium credit card</a> with a <a href="https://www.businessinsider.com/personal-finance/high-annual-fee-credit-card-value-pay-for-itself" target="_blank" rel="noopener">high annual fee</a>, you can often <a href="https://www.businessinsider.com/personal-finance/signs-you-should-downgrade-premium-credit-card" target="_blank" rel="noopener">downgrade to a version</a> with <a href="https://www.businessinsider.com/personal-finance/best-no-fee-credit-card" target="_blank" rel="noopener">no annual fee</a> instead of <a href="https://www.businessinsider.com/personal-finance/how-to-cancel-a-credit-card" target="_blank" rel="noopener">canceling the card altogether</a>. By <a href="https://www.businessinsider.com/personal-finance/how-and-why-to-downgrade-credit-card" target="_blank" rel="noopener">downgrading</a>, you'll preserve the credit line, which could help <a href="https://www.businessinsider.com/personal-finance/how-credit-cards-can-improve-credit-score" target="_blank" rel="noopener">maintain your credit score</a>. Here's <a href="https://www.businessinsider.com/personal-finance/cut-down-credit-card-annual-fees-which-to-close" target="_blank" rel="noopener">how to decide whether to close or downgrade a card</a>.</p></aside><h2>Come up with a plan</h2><p>If you know you racked up some debt in 2020 but are afraid to take a closer look, it's time to dig in. Go through all of your credit cards and any other <a href="https://www.businessinsider.com/personal-finance/how-to-use-personal-loan-to-pay-off-credit-cards" target="_blank" rel="noopener">personal loans</a> you may have used in 2020 and write down the balance and the interest rate for each. This will help you to come up with a plan for how to pay it all off.</p><div><div> <script type="text/javascript" src="https://embed.hifiona.com/script/helper/bundle.js"></script><iframe class="even-iframe" id="iFrameResizer0" scrolling="no" src="https://embed.hifiona.com/ui/multi-product/index.html'&partner=businessinsider-embed&app.purpose=debt_consolidation&access_token=0fce994d-0d62-45db-8f69-ed3599260fc0_a23cc431-6ac6-4025-b6e9-de1c6cd9d35a&company_uuid=1829c16a-1a96-4f68-8dcb-17bb435f79d2&productType=loan&pw_fiona=true&available_products=loan" style="width: 100%; border: none;"></iframe></div></div><bi-shortcode id="related-article-module" class="mceNonEditable" data-type="5c61e63074c5876fc36f4084" data-title="The 'debt snowball' and 'debt avalanche' might sound gimmicky, but they're both highly effective strategies to get out of credit card debt" data-url="https://www.businessinsider.com/personal-finance/how-to-get-out-of-debt-snowball-vs-debt-avalanche" data-thumbnail="https://i.insider.com/5d9e1b26122bd560094512f2" data-shortcode-display-text="Related Article Module: The 'debt snowball' and 'debt avalanche' might sound gimmicky, but they're both highly effective strategies to get out of credit card debt"></bi-shortcode><p>Many prefer the <a href="https://www.businessinsider.com/personal-finance/used-the-debt-snowball-to-clear-debt-and-build-savings-2020-5" target="_blank" rel="noopener">Snowball Method</a>, in which you pay the smallest debt off first and then transfer that payment to the next while working your way up to the highest debt, but the <a href="https://www.businessinsider.com/personal-finance/student-loans-debt-avalanche-why-i-chose" target="_blank" rel="noopener">Avalanche Method</a> will actually <a href="https://www.businessinsider.com/personal-finance/save-money-credit-card-debt-consolidation-2020-6" target="_blank" rel="noopener">save you in interest</a> in the long run.</p><p>Mason Miranda, Credit Industry Specialist at <a href="https://www.creditcardinsider.com/" target="_blank" rel="nofollow noopener sponsored">Credit Card Insider</a>, sums it up this way: "This (avalanche method) has you target debts with the highest interest rates first. Once the first is paid off, you'll have a larger pool of money to put towards the next, burying all your debts beneath an avalanche as you free up more and more money."</p><h2>Budget in your debt repayment</h2><p>While the <a href="https://www.businessinsider.com/personal-finance/pay-off-debt-payment-plan-strategy-2019-10" target="_blank" rel="noopener">strategy you choose to pay off your debt</a> is important, determining where the money is going to come from is even more so. If you haven't already <a href="https://www.businessinsider.com/personal-finance/how-to-budget-money" target="_blank" rel="noopener">created a budget</a>, now is the time.</p><p>Here's how:</p><ul><li><a href="https://www.businessinsider.com/paycheck-calculator-100000-salary-what-is-take-home-pay-2019-2" target="_blank" rel="noopener">Determine your take-home (net) income</a></li><li>Subtract all fixed expenses</li><li>Use what's left to divvy up between variable expenses (such as <a href="https://www.businessinsider.com/personal-finance/save-money-on-food-cut-grocery-bill-system" target="_blank" rel="noopener">groceries</a>, dining out, shopping, etc.) and build in a debt repayment category</li></ul><bi-shortcode id="related-article-module" class="mceNonEditable" data-type="5fb843ab6e5e254b47626541" data-title="Using a 0% APR credit card can save you money on interest, but be sure to avoid these pitfalls that could hurt you in the long run" data-url="https://www.businessinsider.com/personal-finance/should-you-use-0-apr-credit-card" data-thumbnail="https://i.insider.com/5fbbfab250e71a0011556daa" data-shortcode-display-text="Related Article Module: Using a 0% APR credit card can save you money on interest, but be sure to avoid these pitfalls that could hurt you in the long run"></bi-shortcode><p>If you're coming up with a negative amount, it's time to <a href="https://www.businessinsider.com/personal-finance/financial-planner-budgeting-during-covid-2020-8" target="_blank" rel="noopener">cut out or decrease some expenses</a> or take up a <a href="https://www.businessinsider.com/personal-finance/how-to-make-money-on-the-side" target="_blank" rel="noopener">side hustle to increase your income</a>. You won't be able to consistently put money towards your debt if you're having to continue <a href="https://www.businessinsider.com/personal-finance/ways-to-save-money-carrying-balance-on-credit-cards-2020-4" target="_blank" rel="noopener">using those credit cards</a> to pay for your life.</p><h2>Track your progress</h2><p><a href="https://www.businessinsider.com/personal-finance/how-to-pay-off-debt-fast-strategy" target="_blank" rel="noopener">Getting out of debt</a> will likely take you longer than it took to get into debt, so it's easy to get discouraged. Tracking your progress monthly, or even weekly, is a surefire way to keep the momentum going. Applaud how much progress you make with each payment, and keep focused on the <a href="https://www.businessinsider.com/personal-finance/pay-off-debt-before-retirement-advice" target="_blank" rel="noopener">end result of debt freedom</a>.</p><h2>Use a crutch (if needed)</h2><p>If the COVID-19 pandemic is still affecting your job status and you're unable to stick to a <a href="https://www.businessinsider.com/personal-finance/strategy-ive-used-to-pay-12000-credit-card-debt-in-3-months" target="_blank" rel="noopener">debt repayment plan</a>, it may be time to consider other options.<a href="https://www.businessinsider.com/personal-finance/how-to-consolidate-debt" target="_blank" rel="noopener"></a></p><bi-shortcode id="related-article-module" class="mceNonEditable" data-type="5c82945b262898159a1d7bef" data-title="The best balance transfer cards of February 2021" data-url="https://www.businessinsider.com/personal-finance/best-balance-transfer-credit-cards" data-thumbnail="https://i.insider.com/5dfa8b7cacb8fb3e17301957" data-shortcode-display-text="Related Article Module: The best balance transfer cards of February 2021"></bi-shortcode><p><a href="https://www.businessinsider.com/personal-finance/how-to-consolidate-debt" target="_blank" rel="noopener">Consolidating your debt</a> onto a <a href="https://www.businessinsider.com/personal-finance/best-balance-transfer-credit-cards" target="_blank" rel="noopener">balance transfer credit card</a> or <a href="https://www.businessinsider.com/personal-finance/best-personal-loans" target="_blank" rel="noopener">personal loan</a> can give you some breathing room if you're still struggling financially. This will allow you to <a href="https://www.businessinsider.com/personal-finance/what-is-debt-consolidation-make-debt-payoff-easier" target="_blank" rel="noopener">have all your debt in one place</a> with a <a href="https://www.businessinsider.com/personal-finance/save-money-credit-card-debt-consolidation-2020-6" target="_blank" rel="noopener">lower interest rate</a> and <a href="https://www.businessinsider.com/personal-finance/when-to-consolidate-debt-personal-loan" target="_blank" rel="noopener">one monthly payment</a> to keep track of.</p><aside class="quick-tip headline-regular"><p><strong>Quick tip:</strong>If you're in a bind, some <a href="https://www.businessinsider.com/personal-finance/credit-card-rewards-save-money-on-your-bill" target="_blank" rel="noopener">credit cards allow you to redeem rewards for statement credits</a> to offset your bill. For example, the <a href="https://www.businessinsider.com/personal-finance/how-to-use-chase-pay-yourself-back" target="_blank" rel="noopener">Chase Pay Yourself Back</a> program for eligible<a href="https://www.businessinsider.com/personal-finance/best-chase-card" target="_blank" rel="noopener">Chase credit card</a> holders can help you <a href="https://www.businessinsider.com/personal-finance/chase-pay-yourself-back-saved-me-3500-2020-12" target="_blank" rel="noopener">save on common household expenses</a> by cashing in points.</p></aside><p>Although there are a lot of balance transfer cards out there, Meghan Gound, Vice President of Credit Cards at <a href="https://www.navyfederal.org/loans-cards/credit-cards.html" target="_blank" rel="nofollow noopener sponsored">Navy Federal Credit Union</a>, states that the best balance transfer cards feature "no fees, zero percent interest during the introductory period, and a low rate after the intro period expires."</p><p>If you're <a href="https://www.businessinsider.com/personal-finance/credit-cards-and-covid-19-questions-answers-2020-4" target="_blank" rel="noopener">struggling with making payments on time</a> or making the minimum payment, you can <a href="https://www.businessinsider.com/personal-finance/how-to-defer-payments-coronavirus-2020-3" target="_blank" rel="noopener">call your credit card provider</a> to see if you can work out an agreement that will give you <a href="https://www.businessinsider.com/personal-finance/credit-card-companies-financial-assistance-coronavirus-2020-3" target="_blank" rel="noopener">flexibility on payments</a> or <a href="https://www.businessinsider.com/personal-finance/banks-helping-customers-impacted-by-coronavirus-2020-4" target="_blank" rel="noopener">save you interest</a> in the long run. Matt Schulz, Chief Credit Analyst at <a href="https://www.businessinsider.com/reviews/out'u=https%3A%2F%2Fwww.lendingtree.com%2F" target="_blank" rel="nofollow noopener sponsored">LendingTree</a> agrees: "If you're struggling with debt, consider calling your card issuer and asking for a reduced interest rate. Your chance of success is likely higher than you think."</p><bi-shortcode id="related-product-module" class="mceNonEditable" data-type="related-products-credit-cards" data-sheetname="Related Product Credit Cards">Related Product Module: Related Product Credit Cards</bi-shortcode><bi-shortcode id="related-content-module" class="mceNonEditable" data-type="more-credit-card-coverage" data-sheetname="More Credit Card Coverage">Related Content Module: More Credit Card Coverage</bi-shortcode><p><a href="https://www.businessinsider.com/personal-finance/how-to-pay-off-pandemic-credit-card-debt#comments">Join the conversation about this story »</a></p>
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