How to Pay Off Credit Card Debt

Feeling overwhelmed by credit card debt is common, but you don’t have to stay stuck. A future where you control your money instead of it controlling you is much closer than you think.

We'll walk you through some practical steps and effective strategies for tackling your debt head-on, so you can turn the page on your debt story and start writing a new chapter of financial stability and peace of mind.

Assess your financial situation

Before you dive into paying off your credit card debt, it's important to clearly understand your debt and spending habits. A few tools could help:

• An online spreadsheet you can update and access from any device
• A budgeting or debt-tracking app that syncs with your accounts and organizes your balances for you
• Your credit card issuer’s website or mobile app, where you can view your current balance, interest rate and monthly minimum payment

Create a budget you can stick to

When you know how much debt you have, it may help to create a monthly budget. A budget helps you see how much money you have coming in and how much you spend each month, so you can allocate funds to repay your debt. Identify whether your expenses are variable (those that change each month) or fixed (the expenses that stay the same).

Examples of variable expenses:

• Groceries
• Utility bills (electricity, gas, water)
• Entertainment (movies, concerts, events)
• Medical expenses (co-pays, prescriptions)

Examples of fixed expenses:

• Rent or mortgage payments
• Car payments
• Loan repayments (student loans, personal loans)
• Subscription services (streaming platforms, gym memberships)

Once you’ve created your budget, you can identify areas to cut back by looking for non-essential expenses you can reduce or eliminate, such as monthly subscriptions you no longer use or excessive dining out.

Choose a payoff method

You have several different options when it comes to paying off credit card debt. Let’s explore each of them to help you decide which method of debt repayment could work best for you.

Debt avalanche method

The debt avalanche method focuses on paying off debt with the highest interest rate first.¹ You’ll continue to make the monthly minimum payments on all your credit cards and use any remaining money to pay off the debt with the highest interest rate first. Once the card with the highest interest rate is completely paid off, you'll then use those funds to increase your payment amounts on the card with the next highest interest rate.

Debt snowball method

Unlike the debt avalanche method, the debt snowball method focuses on paying off the debt with the lowest balance first.² You pay the minimum monthly payment on all your debts and then devote any remaining money to the debt with the smallest balance.

With the debt snowball method, you mentally set yourself up for success by giving yourself small wins and continuous motivation to pay off a debt in its entirety.

If you’re debating which repayment method is right for you, do the math to test out each method. Sometimes, you may only pay a few hundred dollars more over the long term with the snowball method, so it could be worth it in order to keep your motivation high and stick to your debt repayment plan. But if the difference is thousands of dollars, you may want to start with the avalanche method.

Plan a payoff date

Once you have decided on what debt payment strategy to use, create a practical plan based on your debt and the budget you set to determine when you could realistically be debt-free. Choose a target date when you think you’ll be able to pay off your debt fully. A credit card repayment calculator may help you set a realistic goal based on your debt amount and the monthly payments you’re able to afford.

Write down the date somewhere you’ll see every day to remind yourself to keep working toward your goal.

Speak with your creditors

If you’re concerned about managing your monthly payments, consider reaching out directly to your credit card issuer to see if you’re eligible for a financial hardship program.

Calling your creditors may seem a bit nerve-racking, but a few minutes of explaining your situation could save you money on your debt payment journey. Reach out to your credit card issuers and explain your financial situation honestly and respectfully. Many creditors are willing to work with you, especially if you have a history of making your payments on time. You might even be able to lower your interest rate,³ which could significantly reduce the amount you pay over time. Through a credit card hardship program, you may also be able to request a temporary reduction in your minimum monthly payment to make it more manageable.⁴ Be sure to ask what specific options are available through your creditor, as each company’s accommodations may vary depending on their policies.

Consider consolidating your credit card debt

Debt consolidation could be a smart choice when you have multiple high-interest credit card debts and have a hard time keeping up with the payments. Some common ways to consolidate credit card debt are through a personal loan, a credit card balance transfer offer, a home equity line of credit (HELOC) or a home equity loan.

Debt consolidation loan

A debt consolidation loan is a personal loan that you can use to pay off your credit cards or other existing debt. When you have multiple debt payments with various due dates, it can be easy for one to fall through the cracks. A debt consolidation loan lets you combine your debts into a single payment, often at a lower overall interest rate. With fixed monthly payments and a set payoff date, a debt consolidation loan may make it easier to budget and plan for the future.

Credit card balance transfer

You could choose to transfer your balance from one or more credit cards to another credit card with a lower interest rate. Some credit card providers offer a lower promotional interest rate or a 0% introductory rate on transferred balances for a set period.⁵ The new card provider will pay off the amount transferred from the old card, but it’s best to continue making payments on the old card until the balance transfer is complete. If you transfer the full balance of one card to another, the old card will remain open with a zero balance unless you choose to close it.

A credit card with a balance transfer offer could help you pay off your debt without accruing additional interest, as long as you don’t default on your payments. However, it's important to pay off your credit card balance before the introductory or promotional period ends to avoid higher interest rates. Some credit card issuers may charge a balance transfer fee, which is typically around 3% to 5% of the amount transferred, so be sure you understand the terms before moving forward.⁶

Home equity loan or HELOC

If you own your home, you’ve been building home equity with every mortgage payment. Home equity is the difference between how much you could sell your home for today and how much you still owe on your mortgage.

You may be able to borrow against your home’s equity in the form of a home equity loan or a HELOC.⁷ If so, you could use that money to consolidate multiple debts into one monthly payment. However, both a home equity loan and a HELOC use your home as collateral. If you don't repay your loan as agreed, the lender has the right to foreclose on your home to recover the debt.

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Pave your way to financial freedom

Paying off credit card debt might seem like a huge challenge. It takes time and patience, but with each payment and a plan to curb unnecessary spending, you’ll see your debt shrink and your financial freedom grow. With good financial habits, you can begin your journey to living debt-free.

This article has been updated from previous postings in 2019 and 2025. Melina Duffett contributed.

Sources

1., 2. https://www.nerdwallet.com/article/finance/what-is-a-debt-avalanche
3.https://www.bankrate.com/credit-cards/zero-interest/how-to-lower-credit-card-interest-rate/
4.https://www.bankrate.com/credit-cards/advice/what-is-a-credit-card-hardship-program/
5. https://www.bankrate.com/credit-cards/balance-transfer/what-is-a-balance-transfer/
6. https://www.bankrate.com/credit-cards/balance-transfer/what-is-a-balance-transfer-fee/
7. https://www.bankrate.com/home-equity/what-is-home-equity/#how-to-use