Can Side Hustles Pay Off Credit Cards?

Introduction.

Debt can feel like a heavy weight on your shoulders, especially when it comes to credit card bills. If you’re dealing with mounting balances, you might be wondering if picking up a side hustle is the solution.

Spoiler: it absolutely can be. But like anything else, it takes effort, planning, and the right approach to make it work.

In this guide, I’ll break down how side hustles can help you tackle credit card debt faster, share some practical tips to maximize your earnings and highlight the things to watch out for.

Let’s dive in!

Why Credit Card Debt Feels So Overwhelming

Credit card debt can grow fast because of high interest rates. The average interest rate in the U.S. is around 20.71% as of 2023, and if you’re only making minimum payments, most of your money goes toward interest, not the actual balance. That means it can take years (and way more money) to pay off what you owe.

A side hustle can be a game-changer. By funnelling extra income directly into your debt, you can pay it off much faster and save on interest.

It’s a simple concept: more money coming in equals faster debt reduction. But before jumping in, it’s important to set clear goals and pick the right hustle for your lifestyle.

How Do I Make Side Hustles Work for Paying Off Debt?

Here’s a step-by-step guide to get started:

1. Calculate How Much You Owe

Start by knowing your total debt and the interest rates for each card. Focus on paying off the card with the highest rate first (the avalanche method) or the one with the smallest balance (the snowball method)—whichever keeps you motivated.

2. Set a Target

Decide how much extra money you want to put toward your debt each month. For example, if you want to pay off $5,000 in one year, that’s about $417 a month. Knowing this number will help you choose the right side hustle.

3. Pick a Side Hustle That Fits Your Life

Not all side hustles are created equal, and the best one for you depends on your schedule, skills, and income goals. Here are a few popular options:

Freelancing: Platforms like Upwork or Fiverr let you offer services like writing, graphic design, or social media management.
Rideshare Driving: Apps like Uber or Lyft are flexible, though you’ll need to factor in gas and car maintenance costs.
Delivery Services: With DoorDash, Instacart, or Uber Eats, you can earn money delivering food or groceries.
Online Selling: Clear out your clutter and sell items on eBay, Poshmark, or Facebook Marketplace.
Tutoring: Websites like VIPKid or Tutor.com let you teach students online.
Part-Time Jobs: Retail, hospitality or seasonal work can bring in steady income.

4. Track Your Earnings and Progress

Keep a record of what you’re earning and how much you’re putting toward your debt. Watching the balance shrink can be incredibly motivating.

5. Automate Payments

Once you start earning, set up automatic payments for your credit cards to ensure the extra money goes straight to your debt.

Things to Watch Out For

Burnout: Balancing a side hustle with your main job and personal life can be exhausting. Make sure your schedule is realistic, and don’t overcommit.
Expenses: Some side hustles, like rideshare driving, come with costs (gas, wear and tear on your car). Be sure to calculate your net earnings, not just what you’re bringing in.
Taxes: Extra income from side hustles is taxable. Set aside 20-30% of your earnings for taxes so you’re not caught off guard.

Real-Life Example

Let’s say you owe $7,500 on a credit card with a 20% interest rate. Making the minimum payment of $150 a month means it could take you 27 years to pay it off and cost nearly $11,000 in interest!

Now, imagine picking up a side hustle that earns you an extra $500 a month. By putting that toward your debt, you could pay it off in just 16 months and save thousands in interest.

FAQs

1. How much can I realistically earn from a side hustle?

It depends on the type of hustle and the time you invest. Many people earn $500 to $1,500 a month, but some make much more.

2. How do I stay motivated to keep side hustling?

Set milestones and celebrate small wins, like paying off your first $1,000. Visualize your debt-free life—it’s worth the effort.

3. Are there any risks to having a side hustle?

The biggest risk is overworking yourself, so prioritize your mental and physical health. Also, be cautious about scams when searching for online opportunities.

Further Resources

Here are some helpful tools and articles:

Conclusion

Side hustles aren’t just a way to make extra cash—they can be a powerful tool to take control of your finances and pay off credit card debt faster. The key is to find a hustle that works for you, stay disciplined, and keep your eyes on the prize.

So, what side hustle are you going to try first? Let me know—I’d love to hear about your journey!