How To Pay Off Credit Card Debt

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If you’ve had credit cards for a while, it’s easy to get into the habit of only making the minimum payment each month. This may not be the best choice in terms of your credit score or your overall financial health. In this guide, I’ll explain how to tell whether you have too much credit card debt, plus a few tips on paying that debt off as quickly as possible.


Check your credit report

While you may think that your credit score is the most important thing on your credit report, it’s actually a combination of many factors. Your credit report is a record of every interaction you’ve had with lenders and financial institutions, from the first time you applied for a loan to your most recent loan application and payment history. It also includes debts owed by you or debts owed by other members of your household.

Your credit report will include:

  • All information about all applications for loans or other types of credit (such as home mortgages) made by you or someone else in your household, including whether they were approved or denied
  • Information on any accounts opened in your name as an authorized user, even if those accounts are not managed by you (for example, if a family member added you as an authorized user on one of their cards)

Make a plan to pay off your high-rate debts

Now that you’ve got a handle on your debt, it’s time to figure out how to pay it off. The first step is making a list of all your debts and ranking them according to interest rate—the higher the interest rate, the better. This can help you see where you should be spending more money on debt repayment.

Next, make sure you’re paying at least the minimum amount due on all of your debts except for the highest one (or lowest depending on whether or not you have multiple high-rate loans). If there isn’t enough money left over after covering those bills, then find ways around this by cutting back elsewhere in order to create more cash flow for payments. For example, maybe selling some things or taking up a side gig would help?

Finally comes actually paying down these debts: Take whatever amount is leftover from making all other monthly payments and apply it toward paying down each new loan; start with whichever has been incurred most recently (and therefore carries forth with higher interest rates). Once one loan has been paid off completely—congratulations!—move onto working toward eliminating another debt until eventually all are eliminated completely!

Pay off your debt with the highest interest rate first

If you have multiple credit card debts, it’s important to tackle them in the order of their interest rates. Paying off your debt with the highest interest rate first will save you the most money in interest charges.

  • If you have an extra $100 per month to put toward your debt, use it to pay off the card with the highest interest rate first—even if that card has a lower balance than some other cards. (You can also apply for a personal loan or a balance transfer credit card to pay off this debt.)
  • When deciding how much extra money to send toward one creditor versus another, consider whether they’re planning on raising their rates soon. If so, send funds toward those cards before they do so; otherwise you may end up paying more in fees and higher monthly payments than necessary.

Pay more than the monthly minimum

You’re probably familiar with the minimum payment, which is a fraction of your total balance and allows you to pay off your debt more quickly. The problem is that it also costs you more in interest charges than if you were paying off your credit card debt all at once.

The best way to get out of debt is by making higher payments than the minimum amount due each month. Even if it means skipping a few lattes, eating ramen noodles for dinner or putting some extra cash toward your credit card bill when you have some extra income on hand—do whatever it takes to make bigger payments! If your finances are too tight for this kind of sacrifice right now, focus on paying at least the monthly minimum amount due on each credit card until they’re paid off completely (and then move on to paying down other debts).

If after making these changes you’re still not able or willing to make large enough payments every month to get rid of those balances as soon as possible, consider contacting a nonprofit organization such as Consumer Credit Counseling Service or Debt Management Plan Inc., which can help determine whether there are any legitimate reasons why creditors might be unwilling (or unable) to offer relief from high interest rates or fees. In certain cases where the creditor has been unwilling or unable for an extended period of time and despite diligent efforts by consumers themselves have been unsuccessful in finding relief elsewhere through either negotiation with creditors directly

Put some money in savings

You can also put money in savings and use the savings to pay off your credit card debt. This is great because you may already have some of this money in a separate account, but it’s not doing much good at the moment. While it’s not exactly free money, it is cash that would otherwise be unavailable to you as long as it remains tied up in a different financial obligation.

After all, what good does having an emergency fund do if you’re still paying interest on loans? It doesn’t matter how big your savings account is if it isn’t helping to pay down any of your debt. And if you’re able to pay down more than one loan at once with this strategy, that’s even better!

Create a budget and stick to it

  • Create a budget.
  • Keep track of your spending.
  • Stick to your budget.
  • Don’t get carried away with your spending.

$20 a month is all it takes.

If you were to pay $20 a month on your credit card balance, the amount of interest you would save by making that payment each month is equal to $20,000.

You can calculate how much time it will take for you to pay off your credit card debt by dividing the amount of money being paid per month by the minimum monthly payment. For example, if your minimum monthly payment is $50 and you’re making payments at this amount on a regular basis with no missed payments or other issues impacting your account status, then it’ll take about three years and four months for everything on your current balance (plus any new charges) minus fees to be paid off completely ($50 divided by $49).


If you’re just starting out and feel like $20 a month is a lot, take heart! Your credit score will improve over time, so your interest rates should go down. And if you ever need to borrow money again—whether it’s for a new car, house or an emergency—you’ll be better prepared for that big financial situation.

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