A couple creates a plan to get out of credit card debt.
A couple creates a financial plan to get out of credit card debt.

How To Pay Off Credit Card Debt Faster: 8 Smart Strategies

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There are a lot of ways to pay off credit card debt—from simply paying more than your minimum every month to using a strategy like the snowball method. The best approach for you depends on how severe your debt is, what your interest rates are like, and how much you can realistically afford to pay.

If you’re struggling with credit card debt, it can feel like trying to dig your way out from underneath a mountain. While there’s no one-size-fits-all solution, you do have options. In this article, we’ll give you tips on how to pay off credit card debt faster so you can conquer your financial Everest once and for all.

Here are eight ways to pay off credit card debt that can potentially save you time and money. Combine these strategies with our credit card payoff calculator to create a plan that works for you.

  1. Snowball Your Debts
  2. Avalanche Your Debts
  3. Pay More Than the Minimum
  4. Consolidate Your Debts
  5. Borrow from Family or Friends
  6. Enter a Debt Management Plan
  7. Negotiate a Debt Settlement
  8. File for Bankruptcy

1. Snowball Your Debt

If looking at your credit card debt makes you feel overwhelmed and unmotivated, the snowball method could work well for you. The goal of this strategy is to pay off your smallest debts first to help motivate you with small wins.

Start by completely paying off credit card debt with the smallest total balance. Then, once that’s paid off, take that money and start paying off the next smallest. Continue this until every card is completely paid off. Be sure that you continue to make minimum payments on all your other cards to avoid being charged late fees.

Use our snowball debt calculator to see how this approach may help you.

  • Recommended if: You feel overwhelmed by your debt and need to build motivation. 

2. Avalanche Your Debts

While the snowball method aims to create motivation with small wins, the avalanche method is a more objective strategy. With this method, you start by paying off the debts with the highest interest rates to save more money long term.

Avalanching will likely save you more than the snowball method because it helps you avoid paying more interest.

Note: The point here is to pay off the balance with the highest interest rate, not the highest balance. Attempting to pay off the highest balance first means that the interest on all your other balances is still accruing, meaning you’ll owe more in the long term.

  • Recommended if: You want to save as much money in interest as possible.

A table compares snowballing debts to avalanching debts.

3. Pay More Than the Minimum

Paying more than your monthly minimum can both speed up the repayment process and save you money. This is because any extra money you pay each month will go toward your remaining balance and not toward interest.

Consider the following example on a $5,000 credit card balance with an 18.9 percent interest rate. In this case, paying $460.54 per month rather than the minimum $200 would save you around $900 in interest and pay off your debt nearly three times faster.

Paying Extra on Credit Card Debt
  Minimum Payment Higher Payment
Card Balance $5,000 $5,000
Interest Rate 18.9% 18.9% 
Monthly Payment $200 $460.54
Repayment Time  33 months 12 months
Interest Paid  $1,410.23 $529.69
Total Amount Paid  $6,410.23 $5,529.69
Amount Saved  $0 $880.54
Source: Experian

Your extra payment doesn’t need to be all at once either — you can also make more than one monthly payment to help spread out the cost.

  • Recommended if: You have means to pay more than your monthly minimum.

4. Consolidate Your Debts

Sometimes your debt may simply be more than you can realistically handle, especially given that credit cards often have high interest rates. In this case, finding ways to consolidate your debt into loans with lower interest rates may be helpful.

Debt consolidation restructures your debt from multiple streams into one.

  • Recommended if: You cannot reasonably pay off your debt but have a credit score high enough to qualify for loans or a balance transfer credit card.

Take Out a Personal Loan

Personal loans often have better terms and much more manageable interest rates than credit cards. They are offered through banks and credit unions and can be an effective way to turn mountains of credit card debt into a single, easy-to-tackle monthly payment.

If you’re in a ton of debt, consider consolidating credit card debts from different sources under one personal loan.

Use Your Home’s Equity 

If you have a home, you may be able to use your equity to help pay off credit card debt. This can be done with cash-out refinancing, or even by opening a Home Equity Line of Credit (HELOC).

You can usually find these types of loans with interest rates between five percent to nine percent, which may be better than your credit card’s rate. Just be aware interest rates aren’t the only cost associated with these types of loans. You should also factor in any origination, application, appraisal, or processing fees.

Also, be aware that these types of loans can put your home at risk if you default on payments.

Use a Balance Transfer Credit Card

You can also use a balance transfer credit card to consolidate your debt. These cards allow you to move the debt from one or more credit cards onto another card, usually with a lower interest rate. They sometimes even have zero percent interest for the first year.

A balance transfer credit card allows you to move debt from one or more credit cards onto another card, usually with a lower interest rate.

These types of credit cards may come with a transfer fee — around three to five percent — so make sure you’ll still come out ahead even with any fees.

5. Borrow from Family or Friends

Sometimes you may not be able to reasonably pay off your own debt, especially if your credit score is too low to qualify for consolidation options like loans or a balance transfer credit card. In this case, you might consider borrowing from family or friends.

Set the terms of repayment and follow through. If necessary, you can create a legally binding contract called a loan agreement. You can find templates for these contracts online.

  • Recommended if: You cannot pay off your debts yourself and your credit score is too poor to qualify for loans or a balance transfer credit card.

6. Enter a Debt Management Plan

If you’re overwhelmed by debt and not in a position to borrow money at all, you may benefit from entering a debt management plan. These programs, usually run by nonprofits, can help you pay off your debts faster and for less money.

Program advisors can negotiate lower interest rates with your creditors and consolidate your debts without using a loan. You’ll then set up a repayment plan with the agency, make payments to them, and they will pay off your creditors.

Some options to look into include the National Foundation for Credit Counseling, and InCharge Debt Solutions.

  • Recommended if: You cannot pay off your debts yourself and cannot borrow money — from the bank, family, or friends.

7. Negotiate a Debt Settlement

Another option for those who don’t have the money to repay their debts is settling directly with creditors. In some cases, your credit card company may be willing to negotiate your debt. For example, they may waive past late fees, cut your interest rate, or even allow you to settle by making an offer that’s less than the total debt that you currently owe.

It doesn’t hurt to try. If you’re in a lot of debt, consider calling your credit card company and discussing what your options might be. Negotiating may just get you a better deal. And, worst-case scenario, they’ll just say no.

  • Recommended if: You cannot reasonably pay off your full debt amount.

A table compares debt settlement to debt management.

8. File for Bankruptcy

As a last resort, you may be able to clear your debts by filing for bankruptcy. This option will have lasting negative financial consequences, so avoid it if at all possible.

  • Recommended if: You cannot pay off your debt, need a financial restart, and have no other options.

Chapter 7 Bankruptcy and Credit Card Debt

In a Chapter 7 bankruptcy, you will liquidate your assets and use that money to pay off as much debt as possible. The remaining qualifying debts are then cleared. Chapter 7 bankruptcies often clear credit card debt. However, if you used your credit card to pay off student loans, alimony, child support, or back taxes, these may not be cleared.

Chapter 7 bankruptcies can stay on your credit report for up to 10 years.

Chapter 13 Bankruptcy and Credit Card Debt

Chapter 13 bankruptcies don’t require liquidating all your assets. Instead, you will be put on a repayment plan for three to five years. When the repayment period ends, any remaining qualifying debts, including credit card debt, are cleared.

Chapter 13 bankruptcies can stay on your credit report for up to seven years.

FAQ About Credit Card Debt

Have more questions about credit card debt? Here are answers to some of the most commonly asked questions.

What Happens If You Don’t Pay Off Credit Card Debt?

If you don’t pay off credit card debt, your balance will simply continue to grow, making it harder for you to ever escape a cycle of debt.

Not only does this hurt your finances by requiring you to spend a large portion of your monthly income on debt repayment. It could also seriously damage your credit score, making it harder to take out loans and get new credit cards in the future.

What Happens to Credit Card Debt When You Die?

When you die, credit card debt can be passed on to your spouse or estate. It doesn’t simply go away, so it’s a good idea to focus on repaying your debt while you’re alive.

How Much Credit Card Debt Does the Average American Have?

According to Transunion, as of the second quarter of 2022, the average credit card debt per borrower was $5,270. This is up from $4,817 during the second quarter of 2021.

Education may also play a part in how much credit card debt a person has:

  • Those with college degrees average $8,200
  • Those who attended college but did not graduate average $4,700
  • High school graduates average $4,600

How Much Credit Card Debt Is Too Much?

A little credit card debt can be useful as a way to make purchases you need but otherwise couldn’t make. However, if you start to notice one of the following signs, it’s likely that you have too much credit card debt.

  • You’re only paying the minimum. If you only pay the minimum payment each month, your credit card debt will continue to increase as interest is applied to your balance. If you continue to do this month after month, you may wind up in more debt than you can handle.
  • Your credit utilization rate is high. Credit utilization is the ratio of the total amount of your lines of credit that you’re currently using. For example, if your credit card has a $5000 limit, and you’ve currently used $4000, you have a high credit utilization rate. Many experts say that it’s smart to keep your credit utilization under 30 percent when possible.
  • You use credit cards to pay off other credit cards. This can be a dangerous cycle. If you’re using multiple credit cards to pay each other off, that’s a sign that you’ve bitten off more than you can chew.
  • Your debt-to-income ratio is high. Another important ratio to keep an eye on is your debt-to-income ratio—that’s the amount that you currently owe compared to the amount of money you’re bringing in. If your debt payments are a large (or the largest) portion of your income each month, your credit card debt is likely too high.

What’s the Best Way To Pay Off Credit Card Debt?

The best approach for you depends on how severe your debt is, what your interest rates are like, and how much you can realistically afford to pay. Some popular tricks to paying off credit cards include the snowball method, the avalanche method, paying more than the minimum payment, and consolidating debts.

When it comes to credit card debt, there’s no simple solution — ultimately, the only way to pay it off is to actually pay it down over time. But if you need help with credit card debt, these tricks can help make it more manageable.

Once you’ve decided on a repayment plan, be sure to include it in your monthly budget.

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