How to pay off credit card debt: 7 tricks

Maybe you’ve slowly increased your credit card balance over time, or you had to cover a large, unexpected expense with your card. If you’re carrying a credit card balance from month to month, it might be time to focus on paying it off.  

Even if it feels daunting, paying off your credit card debt is possible. Here are some ways to help you make a plan and stay focused.

Key takeaways

• Paying off credit card debt may help you save money on interest and help you improve your credit scores.
• Choosing an effective debt repayment strategy, building a budget and tracking your spending may make paying off debt more manageable.
• You may find debt relief options available if you contact your credit card issuer.

Credit card debt can impact your overall financial health in several ways. Your balance may grow larger over time because of interest charges. If you’re making only the minimum credit card payment each month, it could take a long time to fully pay off the debt in full. Plus, fees for any late or missed payments can add up. 

A large credit card balance can also negatively impact your credit because credit scores are partially based on your credit utilization. And using too much of your available credit can push you past the 30% utilization rate that experts recommend.

Another perk of paying off your credit card debt is potentially having more room in your budget for saving money and rewarding yourself every now and then. 

You can start paying off credit card debt by choosing a strategy, reducing your spending and making a few key changes. 

First things first: Figuring out how you got into debt may help you avoid overspending in the future. Try going over your credit card statements from the past few months to find patterns in your habits. Are there places where you can make some changes to your daily or monthly spending?

For example, maybe you can cancel your gym membership and work out at home, or you can cook more of your meals instead of dining out. 

If your credit card debt was the result of a large, unexpected expense, you could make a plan to create an emergency fund. This can help you cover big bills in the future without going into debt. 

Creating a repayment plan can help you figure out what works best for you and even help provide motivation. There are two basic strategies that can help you reduce debt:

• Pay off high-interest debts first. Using a strategy sometimes called the debt avalanche method, you’ll make the minimum payments on all your debts but put extra money toward the balance with the highest interest rate. This can help you save money in the long term because high-interest debts are more costly. 
• Pay off the smallest debts first. If you need to build momentum in your debt payoff plan, the debt snowball method might make more sense. With this strategy, you’ll again make the minimum payments on all your debts but then focus on putting any available money toward paying off your smallest balance first. Once you’ve paid that off, you can dedicate any funds that have been freed up to your next smallest debt and so on.

​​​You should always pay as much of your full credit card balance as you can, according to the Consumer Financial Protection Bureau (CFPB).

Why? Paying more than the minimum payment can help you pay off debt more quickly than if you just paid the minimum. That’s because paying more can help you cover the credit card interest charged while also decreasing the total balance on your card.

Paying more than the minimum also helps limit the interest you’ll owe over time. And the less interest charged, the lower your minimum payments could be.

When you reduce spending, you can put more money toward debt and potentially even save money on interest. Here are some ways to track your spending and cut down on expenses: 

• Create a budget. How do you create a budget? List your monthly expenses, such as rent, utilities and groceries, along with your debts, such as credit card balances and student loans. Write down how much you earn each month, and subtract your bills and minimum required debt payments. The amount you have left over is a starting place to consider how much extra to put toward your debt payoff each month.
• Set a goal. Once you know how much debt you have and how much you can pay toward it each month, figure out how long it will take to pay off the debt. Mark that date on your calendar. Having a goal in mind can keep you focused and motivated. 
• Track your spending. Use whatever method works best for you, whether that’s an app, a spreadsheet, or a pen and paper. Write down everything you spend money on, and review the log every few weeks. This is a good way to better understand your spending habits and potentially find areas where you can cut back. 
• Tell a friend or family member. If they know you’re working toward a debt payoff goal, your friends and family can offer support. They may also help you think of ways to budget or fun things to do for free, both of which can help you stick to the goal while still living your life.

While you’re paying down debt, it may be helpful to pay for things in cash so you’re not increasing your credit card balances. And if you need to use a card for your payments, consider using a debit card so you’re not borrowing money.

Debt consolidation allows you to combine multiple balances into a single new one. Some people use a credit card balance transfer or a debt consolidation loan for this purpose. 

A balance transfer credit card offer lets you move unpaid debt from one or more accounts to a new credit card. These cards often come with a lower interest rate for a limited time, which could help you save money if you’re approved. The interest rate typically increases after the intro period ends. So it’s a good idea to make sure you can pay off the balance within that time frame. 

For example, let’s say you have $5,000 in credit card debt and you open a balance transfer credit card with a 0% introductory APR. If the promotional period lasts 18 months, then you’d need to pay about $278 a month to pay off the balance before the interest rate increases. It’s a good idea to check whether the card charges balance transfer fees and to understand the card’s terms and conditions before you apply so you can make a fully informed decision.

A debt consolidation loan may work similarly. Debt consolidation loans are personal loans you can use to pay off multiple debts and convert them to one monthly payment. Then, you make payments on the loan balance until you pay it off in full.

But debt consolidation loans often charge interest, so you could end up paying more per month than you originally planned—or even erase any potential savings.

If you’re having a hard time keeping up with your credit card debt, the CFPB recommends reaching out to your credit card company and asking about options that may be available to settle credit card debt.

According to the CFPB, “Many credit card companies may be willing to help if you’re facing a financial emergency.” The CFPB goes on to say that you don’t have to be behind on your monthly payments to ask for assistance either.

If you’re having trouble with your monthly payments, you could:

• Contact your credit card issuer as soon as possible. Rather than letting debt and missed payments stack up, reach out and explain why you can’t pay the monthly minimum.
• Ask about repayment options. Credit card companies may offer alternative repayment plans or hardship programs. Keep in mind that eligibility may be based on factors like total debt and income.

Too much credit card debt can potentially stand in the way of strengthening your financial health. Balances can grow over time, and they can negatively impact your credit score. And that can affect your ability to qualify for new loans, credit cards and lower rates in the future. 

While it’s not easy, paying off credit card debt is possible if you set up a debt payoff plan. Tracking your credit can also help. Plus, once you start paying down your credit card balances, your credit score may even increase. 

CreditWise from Capital One also makes it easy to monitor your credit. It shows you a breakdown of your total balances and helps you keep track of your credit utilization rate, which is an important part of your credit score. It’s free for everyone—even if you don't have a Capital One account. And checking won’t hurt your score, so you can take a look as often as you like. 

The CFPB describes two basic methods to pay off credit card debt: the debt avalanche method and the debt snowball method. The CFPB also suggests creating a debt repayment plan and budget to stay on top of your credit card balances, track expenses and stay one step ahead of your credit card debt.

Most credit card companies don’t allow you to pay off one credit card balance with another credit card. And using a credit card to pay off another balance may not make debt more manageable in the long run.

Using the debt avalanche or debt snowball methods, you could target the highest interest rate or smallest balance first. Both tactics could help you pay down debt, make progress toward your financial goals and free up extra cash each month.

Paying off credit card debt can feel daunting. But with some research, an effective plan and consistency, you can get one step closer.

And if you’re struggling to stay on top of your debt, learn more about how debt relief or a credit card balance transfer may be able to help.