How to pay off credit card debt: 6 winning strategies

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If you’re wondering how to pay off credit card debt, these 6 tried-and-true strategies can help you pay down your balances and become debt-free. (iStock)

Paying off credit card debt may feel impossible, but it can be done. With a well-thought-out plan and strategy in place, you can make consistent progress toward paying down your balances until you eventually become debt-free. 

Here’s a look at six tried-and-true strategies to help you pay down your credit card debt, as well as some tips for avoiding credit card debt in the future. 

A debt consolidation loan can be a great way to pay down and eliminate credit card balances. Visit Credible to see your prequalified personal loan rates from various lenders in minutes.

1. Pay off the highest-interest debt first

Best for those who want to save on interest charges

Known as the debt avalanche method, this strategy involves making the minimum monthly payments on all your credit cards, except for the one with the highest interest rate. Focus on making as large a payment as possible on your highest-interest card in order to pay down your balance quickly. Then, once that card has been paid off, you’ll move on to the card with the next-highest rate. You’ll continue this process until all your credit card balances have been paid in full.


The biggest benefit to the debt avalanche method is that it’ll save you money on total interest charges. By tackling your highest-interest debt first, you’ll ensure that less interest accrues on your unpaid balances over time. Plus, since the total amount that you’ll owe will be smaller, you should be able to pay off your credit cards sooner, assuming you’re able to keep making the payments consistently.


Unfortunately, it can take longer to see substantial progress with this method, especially if the balance on your highest-interest credit card is fairly large. If you’re someone who tends to get discouraged when you don’t see results right away, you may be better suited to the next debt payoff strategy.


2. Pay off the smallest balance first

Best for those who like to see quick results

With the debt snowball method, you’ll make the minimum monthly payment on all your credit cards, except for the one with the smallest balance. On that card, you’ll want to make the largest possible payment. Then, once you’ve paid off that card, move on to your card with the next-smallest balance until you’re completely debt-free.


The biggest benefit to the debt snowball method is that it provides you with quick results. It’s meant to incentivize you to continue on your debt payoff journey by offering you a series of small wins at the beginning. Even if you only pay off a small balance, your confidence will likely grow as you make additional progress.


The drawback of the debt snowball method is that you’ll likely pay more in interest charges over time. Those extra charges will increase the total amount of money that you’ll pay to your creditors. They can also cause your debt payoff journey to take longer.

3. Take out a debt consolidation loan

Best for those who are juggling multiple debt payments

A debt consolidation loan is a personal loan that you use to pay off high-interest debt, particularly credit cards. To take out a debt consolidation loan, you’ll apply for a new loan with a lender. Then, if you’re approved, you’ll use the funds from the loan to pay off your existing credit card balances. Some personal loan lenders will pay your creditors for you directly.

Credible makes it easy to compare personal loan rates from various lenders, all in one place — and it won’t affect your credit score.


The main benefit of a debt consolidation loan is that it allows you to streamline multiple payments into one. If you’re having trouble keeping up with your minimum payments and due dates, this may be a good option for you. Plus, since personal loans often have lower interest rates than credit cards, there’s a good chance you’ll save money on interest charges over time.


It’s important to note that debt consolidation loans often come with additional fees. Depending on the terms of your loan, the lender may charge an origination fee, which is an upfront fee that covers the administrative costs of underwriting the new loan. Origination fees typically range from 1% to 8% of the total loan amount, and the fee will be deducted from your loan funds when they’re disbursed. In other cases, you may have to pay a prepayment penalty if you decide to pay off your loan early.


4. Use a balance transfer credit card

Best for those with high credit scores 

Balance transfer credit cards allow you to transfer your balances from an existing high-interest credit card to a new card with a lower interest rate. Balance transfer cards often come with a 0% introductory APR for a certain period of time, and some cards may even waive any balance transfer fees during the promotional period. To use this debt payoff method, you’ll first need to apply for a new credit card and get approved. 


The biggest benefit of a balance transfer credit card is the introductory promotional rate. For a limited time, you’ll have the ability to pay down your new balance without any interest accruing on it. This can help you make more progress in paying down your balance. 


Balance transfer credit cards are typically only available to borrowers who have higher credit scores. If you have a lower score, you may need to look into other options. Additionally, there’s the promotional timeframe to consider. After the introductory interest rate period is over, your rate will adjust to the card’s regular rate, which could be higher than the rates you were paying on your original credit cards. Balance transfer cards often come with balance transfer fees, too — typically 3% to 5% of each amount you transfer.


5. Seek help through debt relief

Best for those whose debt has become unmanageable 

Seeking debt relief involves hiring a third party to negotiate with your creditors on your behalf. Debt relief typically comes in one of three forms: a debt management plan, debt settlement, or bankruptcy. With these methods, the third party can help you negotiate repayment, which may be less than the total amount that you owe in some cases.


Where debt relief is concerned, the main benefit is that there will be less legwork for you. Negotiating with creditors often requires making multiple phone calls and sometimes even sending letters. When you hire a third party, much of that work is handled for you. 


This method also has multiple drawbacks. To start, debt settlement companies often charge hefty fees to negotiate your debt for you. The company may also instruct you to stop making payments on your credit cards, which can negatively affect your credit score when the missed payments show up on your credit report. Lastly, some debt settlement companies are disreputable. If you’re thinking about going this route, be sure to do plenty of research. To make sure you’re dealing with a legitimate company, contact your state Attorney General

Using a personal loan to consolidate debt can often be a better option than settling your debt for less than you owe. If you opt for a personal loan to pay down your high-interest credit card debt, visit Credible to see your prequalified personal loan rates in minutes.

6. Borrow money from family or friends

Best for those who don’t qualify for other debt payoff options

If you can’t make any of the other debt payoff options work, you may want to consider borrowing money from family and friends. If you choose this option, it’s a good idea to carefully evaluate who you’ll ask to lend you funds, to draw up a repayment agreement, and to prioritize making any necessary payments.


The access to flexible repayment terms is undoubtedly the biggest benefit of borrowing money from loved ones. Those in your inner circle will often be willing to give you a lower-than-normal interest rate, if they charge you any interest at all. They may also be flexible about your repayment timeline.


Too often, money has the potential to ruin relationships. If you fail to pay back what you owe, it will very likely put a strain on your relationship. 

How to avoid future credit card debt

Now that you have a better idea of how to pay off existing credit card debt, the next step is to learn how to avoid accruing more debt in the future. Here are some strategies to help you stay debt-free:

  • Spend what you can afford. While credit cards allow you to finance purchases and pay them off later, it’s a better idea to treat your credit cards like cash. If you only spend as much as you have in your bank account, you’ll be able to pay off your balances in full and avoid accruing interest or charging up new debts.
  • Pay as much as you can. Even if you can’t pay off your balances in full every month, you should make the largest payment possible. When you only make the minimum payment, it allows a significant amount of interest charges to accrue, which can cost you more money over time.
  • Pay on time. When you make a payment late, interest charges start to add up. You also may have to pay late fees. In addition to costing you money, late payments can also negatively affect your credit score.