Tips for Paying Off Credit Card Debt

Credit card debt can feel overwhelming, but a clear plan can help you pay it off faster and with less stress. The guide below covers practical steps you can take, even if your balance seems large.

Understanding what you owe

What to gather

• List each card, current balance, APR, minimum payment, and due date.
• Note any promotional offers or penalties.

How payoff works

• Interest accrues daily on balances you carry. Paying more than the minimum reduces principal faster.
• The payment you make applies to fees, interest, then principal as per card terms; paying mid-cycle may reduce interest.

Choose a payoff strategy

The avalanche method

• Target the card with the highest APR first.
• Pay the minimum on all other cards, and put any extra payments toward the highest-APR card.

The snowball method

• Target the card with the smallest balance first to gain quick wins.
• After paying it off, roll those payments into the next smallest balance, and so on.

Create a concrete plan

• Build a simple monthly budget that covers minimums plus a fixed payoff amount.
• Automate at least the minimum payments; consider automating extra payments to your chosen card.
• Set a realistic payoff date based on your total balance and available income.

Build a monthly budget

Keep track of essential expenses and identify areas to cut.

Automate payments

Automated payments reduce late fees and help stay on track.

Set a payoff date

A target date gives you motivation and a clear endpoint.

Ways to accelerate payments

• Negotiate lower APRs or request a hardship extension.
• Consider a balance transfer with a 0% intro APR, but read terms, fees, and transfer timelines.
• Use windfalls (tax refunds, bonuses) to boost payments.
• Cut discretionary spending and redirect the savings toward debt.

Prevent new debt

• Pause using cards for nonessential purchases.
• Build a small emergency fund to avoid needing to rely on credit.

Stay motivated and track progress

• Check your balance and progress monthly.
• Celebrate small milestones to keep momentum.

Next steps

• Pick one strategy, set up automatic payments, and start today.