Best Way To Pay Off Credit Card Debt

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Last Updated on November 26, 2020 by Emma


Credit card debt can be extremely expensive, so the best way to pay it off is as quickly as possible! While that can sound easier said than done, there are several ways that you can use to tackle your credit card debt, including free balance transfers, getting a side hustle, and consolidating your debt.

The most important place to start is by acknowledging your debt and working towards a repayment plan. Let’s walk through a step-by-step action plan for paying off your credit card debt, together.

This post may contain affiliate links. If you decide to use them, my blog may earn a small commission at no additional cost to you, which helps to fund more helpful articles for you to enjoy. Find out more in my Affiliate Disclosure. Nothing in this article constitutes financial, or other, advice. These are my views and the results of years of research, testing and learning.

Start by acknowledging your credit card debt

It’s very tempting to leave credit card bills unopened and bury our heads in the sand, but that just leads to late payment fees, sleepless nights and plummeting credit scores.

If you’re in debt, step one is to recognise it and make a commitment not to spend any more money than you have.

You can start by simply writing down your credit card balances in a spreadsheet or just on a piece of paper. Look at your statements to understand what rate of interest, also known as an APR, you are paying on each card. If you are just making the minimum payment each month, then you may find it’s impossible to pay off your credit card because the interest rates are eating up all of your payments, so it’s time to come up with a new plan.

Acknowledge your debt

Cut up your cards

When you’re trying to clear your credit card debt, the worst thing you can do is to spend more money on cards with high balances. Wherever possible, stop the temptation by cutting up the card (just make sure you have means of making payments to it) or hiding it away where you won’t be tempted to use it. You may find that the credit card company try to tempt you back with one offer after another, and cutting up the card can help you to keep a strong resolve not to spend on credit anymore.

See if you qualify for an interest-free balance transfer

Credit card companies regularly try to entice in new customers, and encourage higher borrowing from existing customers, with balance transfer deals. In return for one fee, you might be able to move over a different credit card balance and receive 0% interest rates or just a lower interest rate for six months, 18 months, and as much as 36 months, depending on the deal. These deals can allow you to do much more than make the minimum monthly payment, and may help you to get your balance paid off faster. Remember to close credit cards that you pay off with a balance transfer deal, before you are tempted to spend on them again.

Choose your debt repayment method

There are two main methods of debt repayment:

  • The Debt Avalance, which involves paying off your highest interest balance first, so you minimise the total amount of interest you pay as you pay off your debts. In the case of just having credit card debt, you would pay off the credit card balance with the highest interest rate (APR) first.
  • The Debt Snowball method, in which you list your debts from your smallest balance to the highest balance you owe. You then pay them off one at a time from smallest to largest regardless of the interest rate. This method is the one that the financial guru Dave Ramsey recommends from his long career helping people take control of their finances. The motivation you get from completing repaying a small balance spurs you on to pay off more of your debt. So, in the case of credit card debt, you would pay off your credit card with the lowest balance first. Find out more in my article What is Debt Snowball?

In both methods, you would continue to make the minimum payments on the rest of your debt as far as possible, which will avoid damaging your credit score in case you’d like to apply for a mortgage in the future.

Increase how much you can repay each month by reducing your expenses

A powerful way to be able to get out of debt as quickly as possible is to reduce your expenses every month. Then use this extra money to make more payments towards your credit card debt. There are so many ways to pay less for everyday expenses, which you can read about in Top Tips to Start Saving Money.

It’s essential to create a budget to keep track of your earnings and expenses every month. You might unearth some pleasant surprises and quick wins to get out of debt faster.

Reduce your expenses

Increase your income through a side hustle or a part-time job

Alongside spending less, the other lever to repay credit card debt fast is to increase your income. For some people this may come in the form of working more hours in their current job, for others the right approach could be to take a part-time job alongside a full-time job, for others it could be starting a side hustle. If you stick to your monthly budget, then all of your additional post-tax income could go towards paying off your debts.

For some more ideas on how to increase your income see:

Do the maths, and weigh up the pros and cons of debt consolidation loans

If you are struggling to repay the minimum monthly payments on your debts, and you are concerned about maintaining your credit score, then you could consider whether a debt consolidation loan could be a solution for you.

The pros of consolidation loans are:

  • You can turn multiple debts with separate repayments into one affordable repayment
  • You gain certainty from one fixed repayment at a fixed rate of interest
  • You will often get a lower interest rate than on credit card debt if you have a good credit standing.

The cons of consolidation loans are:

  • Often you’ll have limited ability to make overpayments on top of your monthly payment, which might mean you will be repaying debts for longer
  • You could feel the temptation to get into more debt as you feel less pain from smaller monthly repayments. When faced with significant monthly payments from various debts, some people rise to the challenge of increasing their income or decreasing their expenses to meet those minimum payments.


Don’t sit paying the minimum monthly payments

When paying off credit card debt if you only make the minimum payment you are unlikely to make progress with your credit cards. Your minimum payment could be as low as 2% of your balance, while your debt could be growing at an APR of 18% plus.

Choose either the debt snowball or the debt avalanche approach and take action so that you can prioritise overpaying the debt you are focussing on. You could have a visual reward chart in your home that you mark every time you pay off an extra £100 or whatever amount you feel is significant to your progress.

Automate your credit card repayments where possible

While you are overpaying one credit card balance, don’t drop the ball on the other credit cards. The simplest way to do this is to get set up with a direct debit to cover your minimum payments and build those repayments into your monthly budget.

Conclusion: the best method to pay off credit cards is as quickly as possible!

Interest-bearing credit card debt is expensive and just servicing the minimum payments for years might leave you financially struggling. I recommend spending some time acknowledging the full picture of your credit card debt, and your current repayments. If this feels painful, use that pain to agree that this is the last time you will ever take on credit card debt.

Next draft out a monthly budget and use these free resources for ideas on minimising your expenses and increasing your income:

Then pick either the debt snowball or the debt avalanche method to turbocharge paying off your credit card accounts. An interest-free balance transfer deal can be a nice cherry on the top to save some extra money by reducing the interest rate on a credit card. Just be sure that the amount of interest you save is more than the balance transfer fee.

Credit card

Frequently Asked Questions

What if I can’t afford to repay my card debt?

If your credit card repayments and other debt has become affordable, don’t despair, you have several options:

  • First write out a monthly budget to see if there is an option to make to minimum repayments on your debts.
  • Explore how you can reduce your expenses and increase your income to improve your financial situation.
  • If your current payments are still not affordable, you could explore whether you have a good enough credit score to qualify for a lower-interest debt consolidation loan, that would offer you an affordable monthly payment. If you believe this is the best option for you, try to find a loan that will allow you to make overpayments as you increase your income and decrease your expenses
  • Alternatively, you could speak to your lenders and see if they will accept a lower monthly payment plan from you.

If you fail to keep up with your minimum payments, your credit rating is likely to drop, and you may struggle to qualify for credit such as a mortgage or loan in the future.

How much interest do credit card companies charge?

The average APR you will pay on a credit card varies by provider and your credit rating, ranging from as low as 13% for people with excellent credit ratings to as high as 40% for providers that work with customers with lower credit ratings.

Where can I get free help and advice on paying off debt?

You’ll find lots of free support and ideas for dealing with credit card payments in this article. You can also read How to Pay off Debt Quickly.

If you need formal debt advice, then you can contact one of the many UK debt charities and organisations such as:

They could help you to understand your options if you’re not able to pay off your debt and many of these organisations operate as a registered charity.

What happens if I don’t repay my credit card?

If you stop paying off your credit cards, then the provider will initially charge you late payment fees as they begin chasing you for payments. Your account will then pass into a collections process, and the lender may sell on your debt to a debt collection company or take you to court. Generally, the worst thing that you can do is bury your head in the sand and ignore the credit card company. If you open a dialogue with them, they may suggest options to help you pay your balance over a longer period and help you pay less each month.

Make sure that you don’t let your case escalate to the stage that bailiffs are visiting you to collect your possessions as a means of paying off credit card balances.

What is the best method to repay credit cards fast?

The cheapest method to pay off debts is the debt avalanche method, where you prioritise paying off credit cards with the highest interest rate first. You may also qualify for a 0% interest rate on a balance transfer deal.

My personal favourite route to pay off debt is the debt snowball method in which you pay off your debts from smallest to largest. This method helps to provide the personal motivation you need to stay consistent as you pay off credit card accounts, a loan or any other forms of personal debt.

Should I pay off my credit card with a personal loan?

A personal loan can be an attractive way to get rid of credit cards if you have a good credit score that allows you to qualify for a low-interest rate that will enable you to pay less interest than you would pay on card debt. If you decide to take out a loan, make sure to pay down any credit card balances and close the accounts before you are tempted to spend the money on something else or to pay for more things with your credit cards.

The downsides of taking out a personal loan to pay down a credit card include:

  • You might not be able to create overpayments on your loan without paying a penalty, which could mean you are paying off your debt for longer.
  • You might end up paying more interest on a loan than if you were able to increase your earnings or decrease your spending in a way that helps you to pay off your credit card sooner.

Are credit cards a bad idea?

For some people, credit cards are a means to spend wisely while earning cashback rewards or points that enable savings on another item of spending, without incurring interest. For example, many people in the FIRE community with good credit, find credit cards help them to save money overall by using the points to get cheaper flights or other leisure activities that they would typically pay for.

For others, a credit card is a route to high levels of expensive debt that no amount of rewards and cashback could help you to break free from. Studies show that people tend to feel less pain if they spend money via a credit card rather than spending money in cash, or even on a debit card.

If you are in doubt on whether a credit card may help you, or if you have the necessary discipline to help you spend wisely, my recommendation is to play it safe and stick with a debit card.

What are you experiences with paying off credit cards?

What strategies worked for you?

Do you prefer the debt avalanche or the debt snowball method?

Do you prefer to avoid credit cards?

We’d love to hear from you in the comments below!


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16 thoughts on “Best Way To Pay Off Credit Card Debt”

  1. I also prefer the debt snowball method for paying off my debts. Somehow it feels more achievable to focus on one small debt to get started with.

  2. Having a credit card is tempting in so many ways and the pay back impact is dearly severe. With it, getting indebted is not a problem at all. Lots of people out there are struggling with paying this debt and no way through. Its good this article surely existed. Very informative and thanks for sharing.

  3. Great article Emma
    We only have one credit card and never fell into the trap of having several cards despite all the organisations trying to tie you up
    We find one card useful and thank heavens we paid for our cancelled cruise. The company went bust but we were covered
    The credit card only works for us because we pay it off straight away and never let it build up so no interest is paid . We don’t wait fir statements but clear anything we have bought within 14 days of purchase
    I am sure that your advice will be appreciated

    • Thanks for sharing this Frank. It sounds like you’ve found ways to make credit cards work for you which is great!

  4. Good advice the best move I ever made was taking the decision to stop spending on credit and cut up the cards. It is very fulfilling to pay these debts off and once they are it is surprising how much more disposible income there is when it’s not being eaten up by repayments.

  5. I would recommend that you check the interest rate section of your statements to see which of your credit cards charge the highest interest rate, and concentrate on paying that debt off first.

    Alternatively you can pay off the card with the smallest balance first, then take the money you were paying for that debt and use it to pay down the next smallest balance. Thanks a lot for sharing this awesome article.

  6. It is very true that some people find it very challenging to pay off debt, so they always end up with more and more debts which will not allow them to move forward in life. It is very thoughtful of you to share this article as it’ll help people devise a plan to get out of debt. Your tips are very practical.

  7. Thank you for sharing such an informative post on what is the best way to pay off credit card debt. I have to say that your strategy reminds me a lot of Dave Ramsey and I have to only agree. We just have to acknowledge it first and closing the card one at a time. This will take time but it will happen. Luckily, I paid off my student loans. What I did was I stick to only one credit card and just keep paying the big chink instead of the minimum balance. I also tend to use cash more than credit cards as well. 

  8. I have always wanted to get a credit card, but what kept holding me back was the issue of the debt and paying it off. I had always wondered of an easy way it could be done. Fortunately for me, I have the chance to read this article and learn the best way I can pay off a credit card debt. Thanks for this helpful guide and tip. I did learn a lot from it.


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