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How to Pay off Credit Card Debt

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How to pay off credit card debt.

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We’ve all been there. You find something you love, but you can’t afford it at the moment. So you charge it on your credit card and plan to pay it back eventually. But it happens again. And again. And again, until you find yourself with out-of-control debt.

If you feel overwhelmed, we get it. We hear you. And we’re telling you that it is possible to pay off your credit card debt—without having to perform a miracle.

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    Wondering how to pay off credit card debt? Look at all your options. From there, you can come up with a plan of attack and make some progress. When you keep at it, you’ll eventually be debt-free.

    How to Pay Off Credit Card Debt

    The best way to pay off credit card debt? Stop using your cards, make a budget and stick to it. Try to put any extra money towards your debt, if you can.

    When your credit card debt piles up, it can be easy to pay just the minimum payments or stop paying completely. Try to avoid this if you can. Only paying minimum payments can make your interest add up. Here’s an example:

    Let’s say you owe $6,000 on a credit card with a 15% annual percentage (APR). Your issuer requires 2% of that balance as a minimum payment. If you only pay the $120 minimum payment, you’d have to fork up $9,184 in interest by the time you pay it off.

    Don’t fall into this trap. Here are a few strategies that can help you pay off credit card debt.

    1. Go in With a Plan

    Before you tackle that mountain of debt, you need to know how bad it is. It’s time to collect all the information you need to make a plan. You can use a pen and paper, apps, payoff calculators or spreadsheets to make a budget. Here’s how to get started:

    1. Make a list of all your credit cards
    2. Note the balance, limit, interest rate and minimum payment
    3. Make note of any cards you’re behind on or that have been already sent to collections
    4. Make a list of your regular bills and expenses
    5. Note how much money is left after you subtract all your bills, expenses and minimum debt payments from your monthly income

    Once you know where you’re at, you can start planning a budget. While some people cringe at the word, a budget is really just a plan for your money. It’s making sure you’re in control of where it goes instead of trying to figure out where it went after the fact. Sticking to a budget and not continuing to use your cards is the quickest way to pay off credit card debt.

    That’ll get you right on track to start a budget. And sure, a budget can sound scary. But it just gives you control of your money. When you stick to a budget and avoid using your cards, you can start whittling away that credit card debt.

    2. Pick a Payoff Method

    You know you want to pay off your debt. But figuring out how to pay it off quickly is a whole other ballgame. Two that could help—the debt snowball or debt avalanche methods.

    Whichever you decide on depends on your financial situation, but you have to stick to the one you choose. Jumping back and forth won’t help, and it gets rid of the momentum you need to build for these plans.

    Debt Snowball

    The debt snowball method is based on starting with the card with the smallest balance and putting any extra money you can on the payment. In the debt snowball strategy, make the minimum payment on your other credit cards but nothing extra.

    Once that smallest card is paid off, you move to the next smallest card, but add the minimum payment from the first card to the next one. For example, if the card you just paid off had a minimum payment of $20 and the next card has a minimum payment of $30, your new “minimum payment” is $50. This payoff strategy gives you the satisfaction of seeing a card balance flip to zero early on in your payoff plan and provides an extra emotional boost motivation wise.

    Debt Avalanche

    The debt avalanche focuses on paying off the credit card with the highest interest rate first. This strategy is the most efficient way to attack your debt, but it takes discipline to stick with it, especially if the card with the highest interest rate has a large balance. Once you pay off the card with the highest interest rate, move on to the card with the next highest interest rate and continue on just like in the debt snowball method.

    4. Consider a Balance Transfer Credit Card

    Making extra payments is a great way to pay down debt. Unfortunately, it isn’t always possible. How else can you pay off your credit card debt? It might be time to try a balance transfer card.

    Many credit card issuers offer 0% introductory APRs to customers who transfer a balance over to their card from another. That 0% APR will expire eventually—usually within 12 to 15 months, but some last as long as 18 to 21 months. There’s also usually a fee, which can run 2% to 5% of the balance you’re moving on average.

    Remember that not all balance transfer offers are equal. Here are some things to look for:

    • How long the introductory 0% APR lasts for
    • Whether that APR applies to purchases and not just balance transfers
    • What the go-to APR on balances transfers and purchases will be after the introductory rate expires
    • The fee associated with transferring the balance

    The best balance transfer credit cards don’t charge retroactive interest, but some 0% APR cards will charge interest on the full balance you transferred if you can’t pay it all down before the offer expires. If you’re ready to compare balance transfer credit cards, we’ve got you covered.

    5. Look Into a Loan

    Is getting a loan to pay off credit card debt a good choice? Maybe. Going into debt to get out of debt can be tricky. But if you’re serious about not using your credit cards, a loan can help you save hundreds or thousands in interest and help pay off your credit card debt faster.

    Personal Loans

    Personal loans are installment loans where you agree to make a set monthly payment at a certain interest rate for a specific period of time. A nutshell, when you take out the loan to pay off debt, you get a hard date when the debt will be completely off the books.

    For this to work, you have to make the payments on time. You can’t go back to using credit cards when things get tight. Also, remember that interest rates on your loan are affected by your credit score. This means that, depending on your credit score, you may or may not qualify for a lower interest rate than the one you’re already paying.

    When you’re looking for a loan, compare the following:

    • Whether the APR you can qualify for will be lower than the one your credit card(s) are carrying
    • The length of time you’ll have to repay the loan
    • If the monthly payment fits into your budget
    • Whether there are any penalty fees associated with paying the loan back early

    Remember: The last thing you want to do after using a personal loan for your credit card debt is to build up those balances up again. Otherwise, you’ll have more debt on your hands than you started with. You might want to hide or cut up your cards if you’re choosing this option.

    Debt Consolidation Loan

    If your credit card debt is stacked too high, you might want to use a debt consolidation loan. Debt consolidation will lump your debt into one manageable monthly payment that covers the combined balance on all the cards. Consolidating credit card debt is a great way to simplify the process and could even help effectively lower interest rates than if you separately pay each credit card every month.

    6. Re-Evaluate Current Expenses

    Cutting down on expenses can help you decrease your debt. For example, think of that fancy morning latte is part of your daily routine. Could you use that money towards your cable bill? And what about that monthly gym membership? Do you go often enough to justify the cost?

    When you got out spending, it’s like you’re cutting off weights that hold you back from financial freedom. Don’t think of it as depriving yourself of luxuries—think of it as working towards your debt-free future self.

    7. Consider a Debt Relief Program

    If an aggressive payment schedule sounds overwhelming, we get it. It isn’t for everybody. That’s where other options, such as debt management plans, credit counselors or filing for bankruptcy, come in. Here’s what you need to know:

    • Bankruptcy can wipe out most debts, but be wary. It has serious effects on your credit, so only use it as a last option.
    • Think of credit counselors as your personal money management expert. They’ll review your budget and create a plan to pay off your debt.
    • With a debt management plant, you’ll keep paying your debt. But instead of paying off different credit cards, you’ll make a single payment to a counseling agency.

    Pay off Your Debt, Improve Your Credit

    You’ve probably noticed that the more your unpaid debt as piled up, the more your credit score has gone down. That’s because your amount of debt does affect your credit score.

    It works the other way—if you bring down your debt, your credit score could improve to good credit. As you improve your debt, make sure to monitor your credit through Our free credit report card will monitor your payment history as you work to improve.


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      • Gerri Detweiler

        Paying them off won’t help your credit scores in most cases, but if you don’t pay them you’ll most certainly hear from debt collectors. This article may help: What Happens If I Don’t Pay My Credit Card Bill?

      • Credit Experts

        Paying them off more quickly than agreed might not help your scores — unless it also helps you reduce the amount of your overall available credit that you’re using. You want to aim to use no more than 30% of your limit (less than 10% is even better). has a tool that shows you how much of your credit you’re using, and offers a plan to show you how various actions on your part are likely to affect your score. You’ll find it here:

      • Guest1

        Well, patricia, you’re right. If you pay them off while they are closed, you have the option to reapply for one of your credit accounts.

      • postal_blonde

        I found paying them off did help and making sure you pay everything on time. Not always will it drop off in 7 yrs ….If they attempt to collect from you 6yr and 360 days, it starts that 7 yrs all over again. I paid what i could until they were clear. It shows you are trying.

      • South Dakota

        Thank you for saying that it’s ok to pay the card with the lowest balance first. I find that the satisfaction of paying off a balance is motivation to work on the next bill!

        • Credit Experts

          Different things work for different people — but staying motivated is key! It’s important to find a way that works for you.

      • Gerri Detweiler

        Congratulations! No, it won’t hurt at all to pay them off right away. Just don’t close the accounts. Leave them open if possible. Are you monitoring your scores? I’d love to hear what happens to your scores before and after. You can free credit score here.

        • HBgoldie

          I have many doctor bills that I can not pay. I am disabled and have ben thinking of applying for bankruptcy? Is this a bad idea?

          • Credit Experts

            Why don’t you talk with a bankruptcy attorney to get his or her opinion? Consultations are usually free or very inexpensive.

      • Larry

        pay it off by getting a second job – make more money somehow.

      • Gerri Detweiler

        It sounds like they cancelled $9000 of your debt. If so, they must file a 1099-c for that amount. It doesn’t really matter whether you agreed in writing or not. You may not be responsible for taxes if you qualify for the insolvency exclusion. We’ve written extensively about that. Read more here: 1099-C In the Mail? How to Avoid Taxes on Cancelled Debt

      • Gerri Detweiler

        Have you tried to see whether you qualify for the insolvency exclusion?

      • al

        No if you really can’t afford it your credit rating is bad then don’t. It happen to me many years ago I was broke due to family health problems and could not pay. You come first and your family, because those banks will not be the first to give you a hand and help you out.

      • Credit Experts

        The debt can be reported for 7.5 years after it first went late, assuming no activity on the account (and selling it to another debt collection agency is not considered activity). But differing deadlines and limitations can be confusing. See: Does Your Old Debt Have an Expiration Date?

        • Paul

          To be exact; the debt will not reload unless you agree to pay even a dime…then the 7 years would reset, so just tell the scumbags to…!

          Also; 7 year old debt can actually be removed at 6 years and 9 months, but you have to contact all three credit bureaus and request the files/information be removed.

          • Gerri Detweiler

            Just to clarify, making a payment restarts the statute of limitations but it does not extend the amount of time an item can be reported under the FCRA.

      • fran

        I agree I made the debt and I should pay But do you know how many times I have to fight to get them to pay the amount I could and
        they would not work with me the Bill was to a Doctor who I never seen he was part of a group for my sleep problems I stop breathing in the middle of night 30 times I have Had 2 strokes and a lot of Mimi strokes the bill to him to decide how much air I needed. Bill $435 dollars never mind the 2530.00 for the 11 hrs. there. after insurance I owed him 268.00 and the other 500.00 because of my deductible they work with me they wanted 100.00 a moth to pay him and other Medical bills I was still paying on. I said I could pay 50.00 a Mo and as soon as one of my other bills of 30.00 a moth was paid off I would add it to the one I owed 500.00 then I call the doctors office said I could only pay 50.00 and that was going to be a tight for me they also wanted 100.00 a Mo they finally after 2 weeks and 10 phone calls from me they agreed. I made 2 payments on time to him which made it 168.00 I had another stroke did not make that payment that Mo because in Hospital. sometimes it takes a week or so to get your mind working on all the things you need to think about they sent no letter saying your payment is past due please call or we have tried to reach you .I called them and said I would not get the payment to them on time it would be a week late and was told that 4 days after they did not get my payment they turned it into collection . I explained what had happened and that the place I had owed 500.00 to said don’t worry about the payment you missed nor the one coming up this mouth .stat next Mo with you regular 50.00 payment well this help you get on you feet some I said yes and thanked them very much for being so understanding. I told the Doctors office that had they had waited I could have given them 100.00 that mo. So not all places work for you or with you they would have gotten there Full . like I promised. In my Book places who work with me get top of list when paying the back as soon as possible.

      • justme

        thank you for the information!

      • Lisa Brains

        Yes, you should pay them off because they will continue to ruin your credit. You may want to talk with a local free credit counselor who can help you arrange manageable payments and even have some fees removed. Most collectors want to atleast make a profit on your debt so at least try to negotiate.

        • Gerri Detweiler

          If you don’t pay the balances may grow and you may be sued. It sounds like these debts aren’t too old to be collected, so you may want to resolve it.

      • Delores

        I had a credit card with a high balcnce of 12,158.0 with an apr of 1999 %. the credit company will not reduce by interest rate. My payment is 250.00 which only $21.00 is applied to principal. It would take me 50 years to payoff this balance. I enrolled into a credit program which will negotiate with the credit card company to pay $8000.00.. Will the credit card company come after me for the difference . I have 90 days to cancel the program.

        • Gerri Detweiler

          Delores – I am not sure what program you are enrolled in but it sounds like a debt settlement program. Settlement can work but there is no guarantee the card issuer will settle for that amount. You may want to get a second opinion from a reputable counseling agency. We’ve written about credit counseling here: Does Credit Counseling Work?

      • Credit Experts

        A zero balance is likely to help, especially if your credit utilization (balance relative to credit limit) has been high. But be cautious about closing an account; that can actually result in a lower score. You can read more here:
        Does Closing Your Credit Card Account Affect Your Credit Score?

      • mary

        Yes sir,or get a settlement with the credit cards companies or if it’s in collecting try and ask for a settlement.

      • Adam TurboChicken Gracy

        I highly doubt she was asking if she should pay for it or not. She was probably asking if it was still payable and able to be removed from her credit report.

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