Nobody likes that feeling when you’re scraping by and struggling to stay on top of your monthly payments. If you have a high credit card balance on one or more cards, you might feel like there’s no end in sight. 

At this point, it doesn’t matter how it happened and there’s no sense beating yourself up about it – you can fix it and we can help! Read on for effective strategies you can use to pay off your credit card debt.

1. Target One Card First 

If you’re carrying balances on multiple cards, it can be frustrating and overwhelming to try to wipe them all out at the same time. 

For example: Let’s say you have $15,000 debt spread over three cards. If you pay an extra $100 per month on each of them, the principal balance of each card will only go down slightly. 

So instead of putting extra money on all your cards, you can try one of these popular methods to pay off your credit card debt:

Snowball Method

This strategy focuses on the card with the lowest balance first. You can see the results of your efforts more quickly and you’ll be more likely to continue your mission. 

• Stop using the card with the lowest balance.
• Pay only the minimum amount on your other cards. 
• Put all your extra money on the first card and watch how quickly the balance goes down!
• After you pay off the card, move to the card with the next lowest balance.

Avalanche Method

This strategy focuses on the card with the highest interest rate. It may take longer for you to see the results but, if you crunch the numbers, you’ll see that you quickly save money.

• Stop using the card with the highest interest rate.
• Pay only the minimum amount on your other cards. 
• Put all your extra money on the first card and note how much you pay in interest on that card from one month to the next.
• When that card is paid off, move to the card with the next highest interest rate.

2. Transfer Your Balance 

You can transfer the balance of your target credit card to a new credit card that offers a lower rate. Or, to consolidate debt, you can transfer multiple credit cards to a single card. 

Just be sure the credit limit on your balance transfer credit card is high enough to accommodate the transfers without maxing out the card. 

Here’s how to make a balance transfer work for you:

• Find a financial institution that offers a credit card with 0% APR or a very low rate for an introductory period when you transfer your balance from another credit card issuer. 
• Find the longest introductory period. For example, 24 months is better than six months.
• Aim to pay off your entire balance during that period. 
• Calculate the monthly payments you’ll make during the low-interest introductory period and compare that to what you’re paying now. 
• Be sure the APR after the introductory period is lower than what you’re paying now (in case your balance isn’t yet paid off). 
• Be sure there’s no balance transfer fee.

Balance Transfer Example

Let’s say the institution offers 0% on balance transfers for 24 months. 

• You have a balance of $15,000. 
• $15,000/24 months = $625.
• To eliminate your debt, you need to commit to a monthly payment of $625 for two years. 

You can also look for institutions that offer a percentage of the balance as cash back on your transfer. This is free money that you can put toward your balance for a jumpstart on your payoff mission.

3. Refinance the Debt With an Unsecured Loan

A personal loan is another debt relief option. The average interest rate on a credit card is about 15.07%. The rate for an unsecured personal loan with a 24-month term is likely to be much lower. 

Personal Loan Example

If you take out a personal loan for $15,000 at 9.24% interest: 

• Your monthly payment will be $686.92.
• Your debt will be paid in full in 24 months. 
• Over the two-year term, you pay $1,486 in interest. 

Credit Card Comparison Example

If you have a credit card with $15,000 balance at 15.07% interest:

• Let’s say you can make the same monthly payment of $686.92.
• It will take you 26 months to pay your debt in full.
• You will pay $2627.80 in interest.

So refinancing with the personal loan will save you about $1,141.62 in interest and you’ll be debt-free two months sooner!

4. Ask Your Creditors for Lower Interest Rates 

Sometimes a simple phone call to the credit card issuer is all it takes to get a reduced annual percentage rate (APR). 

• This strategy is more likely to be successful if you have good credit (a score of 730 or higher) and you’re a long-term customer who makes payments on time. 
• Reducing your rate by a percentage point or two can add up to hundreds of dollars saved annually.

5. If Strapped, Make Two Minimum Payments Each Month  

Card issuers typically charge interest on a daily basis, so the sooner you make a payment, the faster your average daily balance is reduced. This means you end up paying less interest each month.

• If you’re on a tight budget, go ahead and pay the minimum due each month – then try to make the same payment again two weeks later. 
• This strategy works especially well if you get paid every two weeks.
• Keep paying at least the minimum amount due twice a month until your debt is paid off.

6. Avoid Getting Back Into Debt Once You’re Out

Once you’ve got yourself out of debt, the challenge is to keep yourself completely debt free – or carry the minimum amount of debt possible. 

Here are a few ideas to keep in mind going forward:

• Make a monthly budget and do your best to stick to it. 
• Try not to add more to your credit card debt while you’re focused on paying it down.
• You will likely need to wait until you have the money to buy certain items instead of using your card to buy now and pay later.
• Once you’ve paid off your credit card debt, only use your card when you know you can pay it off in full within one or two months.
• Always pay on time every month and take other measures so your credit score keeps improving – and you’ll qualify for lower rates.
• Establish a savings routine and build an emergency fund so you can use that money when needed, instead of relying on your credit cards.

The Bottom Line on Paying Off Credit Card Debt

When used effectively, credit cards and loans can boost your purchasing power and provide a rainy day fund so you have peace of mind. 

They’re also handy financial products to keep your credit score on track so you can get financing for the big things in life, like auto loans and home loans.   

Now that you have actionable ideas about how to pay off credit card debt, you might be considering a personal loan or a balance transfer to a low-interest credit card. Read our Guide to Credit Card Balance Transfers to learn more.