How to Pay Off Credit Card Debt

The image represents paying off credit card debt.

By: Melina Duffett

Mar 27, 2025

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7 minute read

Summary

Getting out of credit card debt can feel overwhelming, but it is possible. Learn how to pay off credit card debt with these tips so you can achieve financial freedom.

In this article:

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 assess your financial situation to fully and clearly understand your debt.

Use pen and paper or create a spreadsheet to record your total credit card debt. Organize your information by the amount of debt on each credit card, the interest rate on each card, and each card’s monthly minimum payment. These details may come in handy when you decide which repayment method is best for you.

Create a budget you can stick to

Now that you know how much debt you have, you should create a monthly budget. A budget helps you visualize how much money you have coming in and how much you spend each month so you can allocate funds to repay your debt. Define 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 eating out.

Establish a payoff date

Create a practical plan based on your debt and the budget you established to determine when you could realistically be debt free. Choose the month and year you’ll be able to pay off your debt in its entirety. Write down the date somewhere you’ll see every day to remind yourself to keep working toward your goal and not waste money on frivolous expenses.

Negotiate with your creditors

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 negotiate a lower interest rate,1 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.2 Be sure to ask what specific options are available through your creditor, as each company’s accommodations may vary depending on their policies.

Choose a payoff method

You have several different options when it comes to paying off credit card debt. Let’s take a look at each of them in order to determine which method of debt repayment could work best for you.

Debt avalanche method

The debt avalanche method focuses on paying off the debt with the highest interest rate first.3 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.4 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 by using a Debt Avalanche Calculator or Debt Snowball Calculator. 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 take the more mathematical approach and start with the avalanche method.

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. This option is particularly beneficial if you have good credit, as it can qualify you for more favorable loan terms.5 The two most common ways to consolidate debt are through balance transfer credit cards or personal loans.

Balance transfer credit card

A balance transfer credit card allows you to move existing credit card debt from one or more cards to a new card with a different creditor, usually offering a lower promotional interest rate or a 0% introductory rate for a set period.6 The new creditor will pay off the balance of the old card, but it’s best to continue making payments until the balance transfer is complete.

A balance transfer credit card with 0% APR may help you pay off your debt without accruing additional interest as long 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.7

Personal Loan

A debt consolidation loan involves taking out a new personal loan to pay off your credit cards or other existing high-interest debt.8 When you have multiple credit card payments with various due dates, it can be easy to miss a payment, but with just one loan, you can consolidate everything into a single easy-to-make payment, often at a lower overall interest rate. Using a personal loan to pay off more expensive credit card debt could save you money and make it easier to budget each month.

Pave your way to financial freedom

Paying off credit card debt might seem like a huge challenge, but remember, every journey starts with a single step. 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 a toolbox of healthy financial habits you can start living your debt-free life in no time!

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Sources

1.https://www.bankrate.com/credit-cards/zero-interest/how-to-lower-credit-card-interest-rate/
2.https://www.bankrate.com/credit-cards/advice/what-is-a-credit-card-hardship-program/
3,4https://www.nerdwallet.com/article/finance/what-is-a-debt-avalanche
5.https://www.equifax.com/personal/education/debt-management/articles/-/learn/what-is-debt-consolidation/.
6. https://www.bankrate.com/credit-cards/balance-transfer/what-is-a-balance-transfer/
7. https://www.bankrate.com/credit-cards/balance-transfer/what-is-a-balance-transfer-fee/
8.https://www.investopedia.com/terms/d/debtconsolidation

This article has been updated since 2019. Melina Duffet and Kim Gallagher contributed to this post.

This article is for general education and informational purposes, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any purpose and is not intended to be and does not constitute financial, legal, tax, or any other advice. Parties (other than sponsored partners of OneMain Financial (OMF)) referenced in the article are not sponsors of, do not endorse, and are not otherwise affiliated with OMF.