How to Pay Off Credit Card Debt

Amanda Claypool


Struggling with credit card debt? You’re not alone. Americans are now more than $1 trillion in credit card debt. Combined with record-high interest rates, digging out of debt might feel like a Herculean effort.

The best way to pay off credit card debt fast is to develop a debt repayment plan that you can stick to. Here’s how to pay off credit card debt – and stay out of it too.

Erika Taught Me

  • Develop a budget with a plan to pay off credit card debt
  • Focus on one debt at a time and work to pay it off
  • When you pay off a credit card, take that entire payment and move it to the next one

Count up everything you owe

To build a debt repayment plan, start by counting up everything you owe. Go through your bank accounts, statements, and maybe even your credit report to gather the data for all your outstanding debts.

Record the outstanding balance for each debt, the interest rate, and its minimum monthly payment. You can do this with pen and paper or in a spreadsheet.

Writing everything down makes you aware of how much you owe in total debt. Your monthly payments for each will be a line item in your budget. Knowing how much you owe in total allows you to prioritize the debt you want to pay off first and make decisions about how to design your budget to make that happen. 

Build your budget and pay off credit card debt

Once you know how much you owe, zero in on your credit card debt. Build a budget with the goal of whittling away at your credit card balances. Cutting expenses can help you reallocate your income, freeing up cash to put toward your debt.

Using a notebook or spreadsheet, record your expenses from the past 90 days. You can pull this data from a budgeting app if you use one or look at your credit card and debit card statements.

Zoom in on your discretionary expenses. These are things like going out for dinner or splurging on a trip to Target. You might not have control over the price of gas or the cost of rent, but you do have control over these expenses. Become aware of your spending habits to free up money for debt repayment.

Once you have everything laid out, evaluate your expenses. Is it in line with what you think you’re actually spending? Where can you spend less money? A few ways to make cuts might include:

  • Being more strategic about grocery shopping: buying in bulk can reduce the amount of trips you take to the store and minimize impulse purchases that add to your total grocery bill. There is also evidence that having your groceries delivered actually saves money, even after the delivery fee, because you spend less on impulse items.
  • Cutting subscriptions: all of those $10-$15 monthly subscriptions add up. If you have four streaming services, for example, consider choosing one and cutting the rest.
  • Taking out instead of dining in: save money on restaurant trips for special occasions like birthdays or anniversaries. Opt for takeout instead. Skipping the DoorDash fees and picking up the food yourself can also reduce your restaurant budget.
  • Buying secondhand: just because you’re paying off debt doesn’t mean you have to sacrifice everything. Cut your spending costs by buying gently used items from your local thrift store or on a site like eBay or Poshmark.
  • Reducing major expenses: housing and transportation are probably two of the largest expenses in your budget. If you’re serious about paying off credit card debt you can look for ways to reduce your spending by downsizing your home or getting rid of a second vehicle if you have one.

As you go through this process, you might notice emotions associated with how you spend money. You might go out to eat if you’re feeling lonely or go shopping if you’re feeling anxious. As you figure out your budget, become aware of how your relationship with money got you into debt in the first place. This is important to do if you also want to get out of credit card debt for good.

Choose a credit card debt repayment method

Once you’ve assessed your spending and found opportunities to cut back, see how much you have left over. Use this to pay more than the monthly minimum payment. 

To figure out which debt to make an extra payment on, you’ll want to select a debt repayment method that works for you. These are some of the most popular options.

Debt snowball

The debt snowball method starts with your smallest debt first. Think of this as low-hanging fruit. When you prioritize your smallest debt first, it gets you motivated and helps build momentum toward paying off large debts.

You'll pay the minimum monthly payment on all debts except the one with the smallest balance. When you pay off a debt, you'll add its payment to the next debt.

For example, let's say your first debt has a $100 minimum payment and the next debt has a $200 minimum payment. When you off the first debt you'd then add that $100 (plus anything you were paying extra) to the second debt payment. Making the new payment $300 (plus anything extra) As you pay off debt, your snowball grows, allowing you to increase your monthly payments over time.

If achieving small wins is important to you, this might be a good strategy to start with.

Debt avalanche

The debt avalanche method is another popular debt repayment strategy. Instead of listing your debts from smallest balance to largest balance, you order them from highest interest rate to lowest interest rate. This allows you to tackle the most expensive debt first, reducing the total cost of paying off the debt.

Like the snowball, you'll focus on one debt at a time. When the first debt is paid off, you'll add that payment to the next debt you're focusing on.

Using the debt avalanche method can help you pay off your debt faster, but it comes with a bit more psychological friction than the debt snowball method. You’ll want to stay on top of your budget and make sure you’re making extra debt payments to your most expensive debt to make it work.

Tailored credit card debt repayment plan

Personal finance is personal for a reason. Some debts carry more weight than others. You might have a credit card debt that isn’t the lowest balance or the highest interest rate that you want to prioritize first. You can create a tailored debt repayment plan to prioritize repaying whichever debt is most important to you.

To make a tailored debt repayment plan successful, consider using a visual aid. This can be something as simple as a printable debt repayment tracker. Every time you make a payment, color in the tracker to record your progress.

You might also consider sharing your debt repayment journey on social media. When you hold yourself accountable to others, it can help keep you motivated. Not to mention, you might inspire family and friends to follow your lead too.

Tips for paying off credit card debt fast

Budgeting and coming up with a debt repayment strategy is a good place to start. Once you have a plan in place, look for ways to optimize your spending and increase your income to help you get out of debt faster.

Pay more than the minimum

The best way to get out of credit card debt is to pay more than the minimum. That’s because the minimum payment is designed to help banks and credit card companies generate revenue by charging interest. Minimum payments don’t really tackle your actual debt, which is why it can add thousands of dollars to your total bill and take decades to pay off.

Start using cash

One of the easiest ways to reign in your spending and get out of debt is to stop using your credit cards for discretionary purchases. Sometimes swiping a credit card feels like free money, making it easy to spend beyond your means.

Swap your credit cards for your debit card or use a cash envelope system to pay for things in cash. When the money's gone, it’s gone. Doing this can make sure you’re protecting any money you’ve allocated for debt repayment and not using it to cover day-to-day expenses. 

Transfer your balance to a 0% APR card

A balance transfer credit card will offer 0% APR for a certain period of time, usually between six and 21 months. During the promotional period, your entire payment will go to the principal, not interest. You will not accrue any interest, which can help you blast through your credit card debt.

Here's how much you could save if you do a balance transfer. Let’s say you owe $10,000 on a card with 22% APR and are making the minimum monthly payment of $284. Even if you make no other purchases, it’ll take you almost 5 years to pay off your debt, and you’ll pay a whopping $6,300 in interest.

However, let’s say you make that same transfer and are able to double your monthly payment to $572. You’ll pay off the entire balance in 18 months without paying any further interest — it will only cost you a $300 to $500 balance transfer fee.

Most credit cards charge a balance transfer fee, usually either 3% or 5% of the transferred balance. Before opening a new credit card, make sure you’ll save more in interest than you’d pay in fees.

Here's how to do a balance transfer.

Automate regular payments on your credit card debt

Set and forget extra debt repayments. When extra money lingers in your checking account, it can be tempting to spend it. Automating regular debt payments makes sure you’re sticking to your repayment plan and avoiding the temptation to spend money that you’ve budgeted for your debt.

Bonus: when you’re out of debt you already have this habit in place to begin automating your savings. Instead of budgeting for debt repayment invest to begin building wealth.

Increase your income

First, see if you can negotiate a raise at work. Even in an era of huge layoffs, some employers are still willing to increase workers’ salaries. Make a case for why you deserve a higher salary, ideally backed up by stats or a recommendation from your supervisor.

If you work an hourly job, see if you can sign up for overtime or holiday pay. If you have extra time on your hands, you can start a side hustle, like delivering food for DoorDash or driving for Lyft on the weekends.

You can also look for a traditional part-time job, like bartending on nights or weekends or stacking boxes at an Amazon warehouse.

What to do if you can’t make the minimum payments

If you’ve tallied up your debts, looked at your expenses, and are still struggling to make your minimum payments, you might need extra help. Here are some actions you can take if you can’t make the minimum payments.

Call your credit card company

Creditors recognize that life happens. Many would rather get something instead of nothing. Depending on your situation you might be able to negotiate a repayment plan or enroll in a hardship program.

Call your credit card company and explain your situation. Ask them what they can do to help you to make your payments more affordable.

Consolidate your debt

Debt consolidation loans pay off all your existing credit card balances with a new loan. This means you make one monthly payment, which is typically more manageable. You can do this with a special debt consolidation loan, a personal loan, or use an asset like your home’s equity to access a line of credit.

Debt consolidation usually reduces your monthly credit card payments and decreases your interest rate. This means your debt won’t accrue interest as quickly, making repayment more accessible.

But there are risks to consider before doing this. If you use your home as collateral, for example, you could lose your home if you still can’t make payments. And if you continue to use your credit cards for daily spending, you could wind up going even deeper into debt.

Enroll in credit counseling

There are a number of nonprofits that offer credit counseling for individuals struggling with credit card debt. Credit counselors work with your creditors on your behalf to create a payment plan that works for you. 

Unlike a financial coach, a credit counseling agency may take on your debt. Instead of paying your credit card company, you’d pay your credit counselor. If you go this route, be mindful that you won’t be able to use your credit card anymore and your credit may take a hit.

File for bankruptcy

While not ideal, bankruptcy is an option to consider if your credit card debt becomes too overwhelming. There are two types of bankruptcy to consider:

  • Chapter 7: Eliminates unsecured debt where there isn’t an asset or property that the courts can seize. This includes credit cards.
  • Chapter 13: Restructures debt payments into a pay-off plan that usually lasts three to five years. This is an option to consider if you have property, like a home or car that you want to protect.

The downside of bankruptcy is that it will be a Scarlet Letter on your credit. Chapter 7 is reported for up to 10 years, while Chapter 13 lasts for up to seven years. While credit cards can be discharged, other types of debt — like student loans — can’t be. This can make it hard to qualify for loans in the future, and if you do qualify, you probably won’t get a good interest rate.

Man paying debt. Guide to paying off debt.


What is the correct way to pay off debt?  

There isn’t a right or wrong way to pay off debt. Everyone has different circumstances that will impact how they pay off debt. The best way to pay off debt is to find a strategy that aligns with your financial situation and habits.

The best strategy is the one you'll actually follow through with.

Which credit card should I pay off first?

The credit card you’ll want to pay off first will depend on the strategy you choose. The most cost-effective approach is to pay off the debt with the highest APR first. This is going to save you money on interest over the long run and help you get out of debt quickly.

But a lot of people prefer to tackle their debts from the smallest balance to the largest balance.

Will paying off my credit cards increase my credit score?

Probably. Paying down debt can help reduce your credit utilization rate. This comprises 30% of your credit score. Reducing the amount of debt you owe increases your available credit, improving your score.

Of course, if you take a more extreme measure, such as bankruptcy or debt consolidation it may hurt your credit score for the time being. But becoming debt-free is more important than a temporary hit to your score. Do what will be best for you long term. 

Latest Articles

Capital One Quicksilver Cash Rewards Credit Card Review: 1.5% Flat Cashback Rate

Best Southwest Credit Cards in March 2024

Best Credit Cards to Build Credit in March 2024

What Is Growth Investing and How Do You Pick Growth Stocks?

Best Hotel Credit Cards in March 2024

Related Articles

what is the debt snowball

What Is a Debt Snowball?

If you live in the tropics and have never known the joy of a good winter romp, the meaning of the personal finance metaphor “debt

how to do a balance transfer

How to Do a Balance Transfer the Smart Way

The right balance transfer promotion can help you consolidate multiple balances into one, which simplifies your financial to-do list. More importantly, it can save you

Compare To Other Cards

Best Offers From Our partners

Reward rate

Welcome bonus

Annual fee

Regular APR

Recommended credit

Author picture

I'm an award-winning lawyer and personal finance expert featured in Inc. Magazine, CNBC, the Today Show, Business Insider and more. My mission is to make personal finance accessible for everyone. As the largest financial influencer in the world, I'm connected to a community of over 20 million followers across TikTok, Instagram, YouTube, Facebook and Twitter. I'm also the host of the podcast Erika Taught Me. You might recognize me from my viral tagline, "I read the fine print so you don't have to!"

I'm a graduate of Georgetown Law, where I founded the Georgetown Law Entrepreneurship Club, and the University of Notre Dame. I discovered my passion for personal finance after realizing I was drowning in over $200,000 of student debt and needed to take action-ultimately paying off my student loans in under 2 years. I then spent years as a corporate lawyer representing Fortune 500 companies, but I quit because I realized I wanted to have an impact; I wanted to help real people and teach them that you can create a financial future for yourself.

Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. This in no way affects our recommendations or article content.

Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. This in no way affects our recommendations or article content.

Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. This in no way affects our recommendations or article content.